Estate agency put on red alert list

image of house keys

The pandemic has suited some businesses rather better than others, but one estate agency has found itself on a red alert list, thanks to its actions after successfully tapping the funding available.

Last year, Foxtons reported a 12% fall in revenues to £93.5 million, but its pre-tax losses reduced from £8.8 million to £1.4 million. It has done so well it has decided to pay its chief executive a short-term bonus of nearly £400,000.

The bonus is slightly less than the almost £600,000 he received the previous year but his total pay package was £1.6 million – compared to £1.25 million the previous year.

All very good, but over the last twelve months the group has benefited from business rate relief of £2.5 million and furlough support for its staff of £4.4 million. The group also released new shares to its shareholders, raising a further £22 million in capital.

All this has led the shareholder advisory service, ISS, to recommend that investors vote against the package. ISS said there was “a material disconnect between bonus outcomes and company performance for the year” which did not “adequately acknowledge the impact of Covid-19, which has caused the company to seek government support and conduct an emergency (dilutive) capital raise during the year”.

The Institutional Voting Information Service (IVIS), which identifies key issues within FTSE companies to provide corporate governance advice, has put Foxtons on red alert, its traffic light level of strongest concern. IVIS is part of the Investment Association which represents over 200 UK investment managers.

Foxtons said: “Like many businesses, Foxtons was forced to close for months over the past year. We were very grateful for government support which we used for as short a period as possible but entirely as it was intended: to keep people in jobs during a length closure.”

He admitted that the estate agency had traded for much of the last year.