Foxtons has warned earnings for 2016 are set to plummet 46% in a trading update to the stock exchange.

In its trading update for the year to 31 December 2016, ahead of its audited results announcement on 8 March 2017, the London based estate agent stated earnings before interest, tax, depreciation and amortisation will crash from £46m in 2015 to £25m in 2016. The group also stated total group revenue for the year would fall 11% to around £133m, compared to £150m in 2015.

Revenue for the final quarter of 2016 was around £26m, a 25% drop on the £35m during the same period in 2015.

The group reported the reduction in revenue for the year reflected the significant fall in sales volumes immediately following the first quarter of 2016. In the final quarter of 2016, sales revenues were around £12m, compared to £20m at the same point in 2015, as volumes remained subdued.

Lettings revenues faired better in the final quarter of 2016, matching 2015’s figure of £13m.

Nic Budden, chief executive of Foxtons, said: “Despite a challenging year across the residential property markets, we have continued to make good progress in respect of our strategic initiatives, including building our presence in PRS and new homes, and leveraging our technology using data analytics and digital marketing to enhance our customer proposition. We also opened seven new branches in 2016 and a further two branches in outer London are due to open in Q1 2017.

“Looking ahead, we expect trading conditions to remain challenging in 2017. Should current levels of sales activity continue in the short term, it is likely that 2017 volumes will be below those in 2016. Our balanced business model provides resilience against sales market cycles and we have a strong balance sheet with no debt. Our high-touch approach to customer service continues to be a key differentiator and as the most recognised residential brand in London, we are uniquely positioned to manage through the market uncertainties and take advantage of any change in conditions.”

Foxton’s shares plunged 10% to 89p in early trading this morning. Earlier this week Foxtons was downgraded to a SELL by analysts at Peel Hunt, with a target price of 80p on the stock. However, analysts at Numis reiterated its BUY recommendation this morning with a target price of 123p.