Foxton's Share Price dropping rapidly

antrobus

Foxtons are in the news today.

Some landlord is upset because he had Foxtons managing one of his properties. They engaged a contractor to change a light fitting at the property. Contractor charged £412.50. Foxtons added on another £137.50 'commission' on top, plus charged him another £55 plus VAT as a fee. Plus it seems the contractor paid them a kickback on top.

Legal action is in progress.

http://www.thisismoney.co.uk/money/news/article-3113604/Estate-agent-Foxtons-risks-huge-legal-bill-charging-616-fix-light.html

padington

Generali wrote: »

If you read the annual report they claim to be scalable with very low incremental costs per branch. If that is true then they should simply be able to transition to a low cost, bulk EA.

IF thst is true.

I think they are the next blockbusters, i would be very cautions letting money ride on their horse for much longer. Technology has pulled the rug from under their model. Once the public catch up and start feeling confident not using a traditional estate agent, I think it will be tears at bed time for them.

I can't see them offering a 'lite' service until it's too late and when they do it will spell doom for their share price.

Its possible that the public might not 'catch up' for ten more years though.

A company that supports and creates an umbrella for ethical and qualified independent estate agents to work from home on a low fee basis, I might be interested.

Samsonite1

antrobus wrote: »

Foxtons are in the news today.

Some landlord is upset because he had Foxtons managing one of his properties. They engaged a contractor to change a light fitting at the property. Contractor charged £412.50. Foxtons added on another £137.50 'commission' on top, plus charged him another £55 plus VAT as a fee. Plus it seems the contractor paid them a kickback on top.

Legal action is in progress.

http://www.thisismoney.co.uk/money/news/article-3113604/Estate-agent-Foxtons-risks-huge-legal-bill-charging-616-fix-light.html

This seems pretty bad. I feel that they deal with a lot of wealthy people who do not care that much about the costs - if those wealthy people are enough to keep them in business then they will keep getting away with it.

padington

Samsonite1 wrote: »

This seems pretty bad. I feel that they deal with a lot of wealthy people who do not care that much about the costs - if those wealthy people are enough to keep them in business then they will keep getting away with it.

If they can survive with just working with easily manipulated rich people to buy over priced properties, then maybe, it's a toxic brand if you ask me on top of the fact that it's waging a war against the Internet, not an easy fight to win. Google for sale buttons soon, won't even need zoopla ...

My niece used to work for them, she hated having to tell people. Not a good sign.

The Information Age is a bad time to be a middle man, especially middle men known to rob their customers.

If I were them I would issue a new ethical guidance policy and ensure all members of staff are qualified to the best industry standard and commission a bloody large advertising campaign to shout about it and quickly.

Samsonite1

padington wrote: »

If they can survive with just working with ignorant rich people then maybe, it's a toxic brand though if you ask me.

A brand that makes its customers feel like mugs can't be a good one.

Oh yeah, could not agree more - unfortunately billionaires are not in the business of caring and their business is will be what floats them. They need to be the ones to be put off.

padington

Samsonite1 wrote: »

Oh yeah, could not agree more - unfortunately billionaires are not in the business of caring and their business is will be what floats them. They need to be the ones to be put off.

I almost bought and sold with Foxtons and I'm not super rich. If they lose all their normal people customers with one house I would imagine they lose a massive part of their market and their share price will tank with it.

Suppose they will always have the super rich market, so never go bankrupt but all things equal, would not want my money riding on them, especially now.

However I guess it does depend on how cheap they become.

hpifever

Down to 237. Maybe people are nervous that foxtons will get sued buy all of their client landlords. Oh dear.

cells

Generali wrote: »

If you read the annual report they claim to be scalable with very low incremental costs per branch. If that is true then they should simply be able to transition to a low cost, bulk EA.

IF thst is true.

What is low cost? 5% margin 10% margin lower?

Estate agent industry is worth ~ £4 billion turnover annually (so foxtons already has 3-4% of the market and much more of the London market)

10% net return would mean £400 million annually for a player with 100% of the market

For a "tesco" with 30% of the market its ~£120 million a year

For an "aldi" with 5% of the market its ~£20 million a year

padington

Anyone notice that the buy to let landlord suing foxtons was also a lecturer ....

Generali

padington wrote: »

Anyone notice that the buy to let landlord suing foxtons was also a lecturer ....

..........in law!