Foxtons and EasyJet shares dive on Brexit fallout

LONDON — Shares in EasyJet dived Monday after the no-frills airline warned that Britain’s vote to quit the EU would hurt its business over the coming months.

London upmarket estate agency Foxtons had also warned that profits would be hit this year after Britain’s shock referendum vote to quit the EU.

The grim news sent Foxtons’ share price tumbling by more than a fifth of its value and stoked worries that Brexit could spark a slump in the London’s property market, which has benefitted from record-low interest rates from the Bank of England for more than seven years.

Prior to Brexit, there were already signs that the high-end London property market was slowing after the government hiked taxes on transactions aimed at preventing a bubble.

Around (11:00 GMT), Foxtons shares nosedived to a loss of almost 22 per cent at 105.50 pence.

The British carrier said last week’s referendum result would create uncertainty in the economy and among consumers, impacting its second-half performance that ends in September.

The news sent EasyJet’s share price plunging with a loss of nearly 19 per cent at 1,065 pence around midday — making it the biggest faller on London’s benchmark FTSE 100 index, which was down 1.7 per cent overall.

“Easyjet is the biggest loser... as the airline industry suffers amidst fears that the rapid depreciation of the pound may weigh on consumer choice when deciding on their upcoming summer holidays,” said David Cheetham, market analyst at traders XTB.

The British pound tumbled Monday to the lowest level in almost 31 years at $1.3194 on Brexit fallout.

EasyJet on Monday said recent changes to exchange rates and higher fuel prices on the back of recovering crude were expected to “add around £25 million [$33 million, 30 million euros] of additional cost” in the current financial year.

EasyJet is a British low-cost airline carrier based at London Luton Airport. It operates domestic and international scheduled services on over 700 routes in 32 countries. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. 

The broader London stock market also sank Monday on worries over fallout from Britain’s surprise vote on June 23 to leave the 28-nation European Union.

“The run up to the EU referendum led to significant uncertainty across London residential markets and the decision to leave Europe is expected to prolong that uncertainty,” Foxtons said in an official statement to the London Stock Exchange.

“Whilst it is too early to accurately predict how the London property sales market will respond, the upturn we were expecting during the second half of this year is now unlikely to materialise.”

Foxtons added that both its 2016 revenues and operating profit — as measured by earnings before interest, tax, depreciation and amortisation — would be “significantly lower” than in 2015.