RNS Number : 6521D
M Winkworth Plc
11 September 2024
 

M Winkworth Plc

 

Interim Results for the six months ended 30 June 2024

 

 

M Winkworth Plc ("Winkworth" or the "Company") is pleased to announce its unaudited interim results for the six months ended 30 June 2024.

 

Highlights for the period:

 

·           Network revenues 6% higher at £27.9 million (H1 2023: £26.4 million)

·           Network sales revenues up by 9% to £13.4 million (H1 2023: £12.3 million)

·           Network lettings revenues up by 4% to £14.5 million (H1 2023: £14.0 million)

·           Network sales revenues accounted for 48% of total network revenues (H1 2023: 47%)

·           Winkworth revenues at £5.14 million up by 20% on H1 2023 (H1 2023: £4.27 million)

·           Majority-owned offices generated revenues of £1.51 million (H1 2023: £1.14 million)

·           Profit before taxation up by 26% to £1.02 million (H1 2023: £0.81 million)

·           Cash balance at 30 June 2023 of £4.12 million (30 June 2023: £4.23 million)

·           Three new offices opened and four refranchised

·           Ordinary dividends of 6.0p per ordinary share declared during the period (H1 2023: 5.8p)

 

Dominic Agace, CEO of the Company, commented: "Our first half results are in line with expectations and reflect an uptick in sales, with a greater number of properties coming to market and transactions returning to more normalised levels. Our lettings and management business has been more subdued but underpins a strong performance from the group. With an above average number of franchisees expected to be added in 2024, we are confident in the outlook for the second half and beyond.

Investor presentation

Dominic Agace, CEO of the Company, and Andrew Nicol, CFO of the Company, will present the Company's interim results via the Investor Meet Company platform on 11 September 2024 at 14.00 BST.

The presentation is open to all existing and potential shareholders who can sign up and register to participate for free at:

https://www.investormeetcompany.com/m-winkworth-plc/register-investor

Investors who already follow Winkworth on the Investor Meet Company platform will automatically be invited.

For further information please contact:

M Winkworth Plc                                                                             Tel : 020 7355 0206

Dominic Agace (Chief Executive Officer)

Andrew Nicol (Chief Financial Officer)

 

Milbourne (Public Relations)                                                     Tel : 07903 802545

Tim Draper

 

Shore Capital (NOMAD and Broker)                                        Tel : 020 7408 4090

David Coaten

Rachel Goldstein

Henry Willcocks

 

 

About Winkworth

 

Winkworth is the leading London franchisor of residential real estate agencies with a pre-eminent position in the mid to upper segments of the sales and lettings markets. The franchise model allows entrepreneurial real estate professionals to provide the highest standards of service under the banner of a long-established brand name and to benefit from the support and promotion that Winkworth offers.

 

Winkworth is admitted to trading on the AIM Market of the London Stock Exchange.

 

For further information please visit: www.winkworthplc.com

 



 

Chair's Statement

 

2024 is proving to be a much more positive year for Winkworth than 2023, albeit that the first half increase in completed sales has lagged the level of sales agreed. With this uptick, we expect the ratio of sales to rentals within our full year gross revenues to be above the 48:52 ratio achieved in the first half of 2024 and the full year 2023.

 

Part of this is due to the recovery in demand for houses, an important segment of the market in which Winkworth excels. As has been mentioned previously, we have seen an increased number of families moving home, some down-sizing, some relocating, and some moving up.  

 

We invested in our operations in 2023 with some impact, of course, on our profitability. But we anticipate that this investment will bear fruit towards the end of this year and into 2025.

 

Over the last six months I have had the enjoyable opportunity of visiting several of our franchisees, some in new offices and some in more established ones, and I have found there is a very strong Winkworth spirit that augurs well for the future. The steps taken to refresh our organisation over the last 18 months have been positively received by our franchisees. From my visits, I see great teamwork, locally focused, with a great selection of property to market and the skill sets to close transactions.

 

Our equity-owned offices have expanded, and we are targeting good profitability from all four businesses in 2025. I have confidence that these offices are increasingly providing not only an important financial contribution to the Group, but also training grounds for future franchisees. The franchisee who we bought out of Tooting, for example, is now very successfully running Streatham and Herne Hill, having reinvested in these offices with some help from the Group.  

 

Winkworth's strategy is to optimise its network's capacity to offer customers a cross-section of suitable property in both the sales and rental markets, and so to generate a high level of enquiries. Every month our website receives on average 360,000 enquires and delivers over 4,500 enquiries to our offices, which no small, independent company can match.  It is the cross-section of property that we handle and the number and quality of the properties on our database that drives our sales and rentals success and defines Winkworth's market position and the power of our long-established brand.

 

I have great confidence, therefore, in Winkworth's long-term growth prospects. We have extended our network in the London boroughs and some of these extra offices result from expansion by our existing franchisees - we expect this trend to continue. Outside of London, areas such as Exeter, Reading and Norfolk have exciting growth plans for 2025.

 

Finally, I would like to thank John Nicol, who is retiring as a non-executive director, for his 10 years of service. John has made a very valuable contribution to the group during his tenure and we wish him every success with his future plans.

 

Simon Agace
Non-Executive Chair
10 September 2024



 

CEO's Statement

 

Despite interest rates remaining relatively high in the first half of this year, 2024 has to-date been very encouraging. An increase in sellers coming to the market has drawn out demand from buyers and this, combined with more positive economic news, has led to far better conditions than 2023, when uncertainty over the outlook for interest rates weighed on activity.

 

Network sales revenue in H1 2024 was up by 9% on H1 2023, but sales agreed is a much stronger 21%, reflecting extended conveyancing times which will push much of this activity into H2 2024 completions.  A return to popularity of city living, as post pandemic patterns continued to normalise, but without significant price escalation, led to London recording the highest level of growth, with sales income increasing by 11%, outperforming the average performance of our network. 

 

We were pleased to note that this latest increase in activity meant that, since 2019, our national market share for sales agreed has grown by 36%¹. We have combined this expansion in market share with a resolute focus on delivering on our proposition to clients and we are proud of the fact that, according to the latest data, Winkworth has the highest conversion rate from new instruction to exchange of £1m+ homes of the top ten estate agents in London².

 

In line with the trend that started in August last year, lettings growth slowed, with network revenue up by 4% in H1 2024 but applicants 3% down on last year, as tenants hit affordability ceilings and the reversal of the move out of London to the country finally settled down, albeit with rental prices remaining at high levels. Our network growth in the country markets, where there is greater affordability, meant that lettings revenue there outperformed the network average, with growth of 8%.

 

The combination of a slowing of the rental market and an uptick in sales activity meant that our sales to lettings revenue ratio moved from 47:53 in H1 2023 to 48:52% in H1 2024. This healthy balance of income reflects our ability to benefit from a more active sales market, while revenues remain underpinned by our important lettings and management business.

 

In H1 2024, gross revenues of the franchised network of £27.9m were 6% higher year-on-year (2023: £26.4m). Total sales income was 9% higher at £13.4m (2023: £12.3m) while Lettings and Management increased by 4% to £14.5m (2021: £14.0m).

 

At £5.14m, Winkworth's revenues were 20% higher than H1 2023 (H1 2023: £4.27m), and profit before taxation rose by 26% to £1.02m (H1 2023: £0.81m). The Group's cash stood at £4.12m at 30 June 2024 (H1 2023: £4.23m) and ordinary dividends of 6.0p per ordinary share were declared for the first half of the year (H1 2023: 5.8p).  

 

This year we have focused on evolving the business, with the appointment of a new executive director to the board and two new non-executives. In addition, we have increased investment into our digital know-how and new business teams to expedite growth, prepare for potential legislative changes and deliver on digital projects to future-proof our business.  We believe that these increases in costs will deliver greater revenue growth in the medium term.

 

We are on track to deliver on our annual target of eight new offices, having in H1 2024 already opened three and with a further five in the pipeline. In addition, we refranchised four offices in H1 2024 and have a further seven refranchises under negotiation. Of this total of 12 new offices or talented new operators, it is planned that 9 will be in the London area.

 

Our entrepreneurial manager partnerships at our equity-owned offices have continued to grow their market share and revenue contribution, with progress in three out of four of our ventures being above expectations. New management in the fourth has now settled in and this change is expected to bear fruit in 2025.

 

 

Outlook

Now that the election is behind us and a government with a strong majority is now in place, ending years of political uncertainty, and with interest rates set to decline, early indications suggest that activity in the property market will increase. Sales agreed have noticeably accelerated since the general election in early July 2024. This increase in activity has been fuelled by the highest number of properties on the market in the last five years and so reflects supply meeting demand rather than demand driving price increases. We therefore expect price increases to be modest in a new era of higher interest rates and taxation.

 

In the lettings market, we see more uncertainty as the market awaits the implementation of new legislation. We anticipate that there will be a further reduction in supply as landlords exit the market and aren't replaced, particularly in the short term as some look to speed up their exit in anticipation of increases in capital gains tax.    

 

Note¹: TwentyEA - Winkworth's SSTC market share H1 2019 vs Winkworth's SSTC market share H1 2024

Note²: Twenty EA - Based on Exchange data from 1st January 2024 - 7th July 2024. The Top 10 estate agents in London are defined as the top 10 estate agents in London ranked by number of New Instructions during this period.

 

Dominic Agace

Chief Executive Officer

10 September 2024

M WINKWORTH PLC

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the period 1 January 2024 to 30 June 2024







(Unaudited)


(Unaudited)









Period


Period









1.1.24


1.1.23


(Audited)







To


To


Year ended







30.6.24


30.6.23


31.12.23







£000's


£000's


£000's












CONTINUING OPERATIONS

 










Revenue


2




5,143


4,267


9,265












Cost of sales






(880)


(776)


(1,573)












GROSS PROFIT

 





4,263


3,491


7,692












Other operating income






-


1


1

Administrative expenses






(3,273)


(2,696)


(5,848)

Negative goodwill






-


-


252












OPERATING PROFIT

 





990


796


2,097












Finance costs






(32)


(19)


(39)

Finance income






63


34


88

 







PROFIT BEFORE TAXATION

 





1,021


811


2,146























Taxation






(262)


(249)


(467)












PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

 





759


562


1,679

 

Profit and total comprehensive income attributable to:

Owners of the parent






759


559


1,668

Non-controlling interests






-


3


11

 








 

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

 





 

759


 

562


 

1,679

 








 

Earnings per share expressed











in pence per share:


3









Basic






5.88


4.33


13.02

Diluted






5.83


4.25


13.00












 

                 M WINKWORTH PLC

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 June 2024


(Unaudited)


(Unaudited)


(Audited)


30.06.2024


30.06.2023


31.12.2023









Notes

£000's


£000's


£000's

ASSETS






NON-CURRENT ASSETS






Intangible assets

4


1,275


930


1,300

Property, plant and equipment

869


596


984

Prepaid assisted acquisitions support

572


624


607

Investments

7


33


63

Trade and other receivables

693


321


350








3,416


2,504


3,304







CURRENT ASSETS






Trade and other receivables

1,492


1,454


1,450

Cash and cash equivalents

4,124


4,234


          4,548








5,616


5,688


5,998

TOTAL ASSETS

9,032


8,192


9,302







EQUITY






SHAREHOLDERS' EQUITY






Share capital



65


65


65

Share premium



179


179


179

Retained earnings

6,380


6,059


6,396


 

6,624


 

6,303


6,640

 

Non-controlling interests

 

-


 

105


 

-

TOTAL EQUITY

6,624


6,408


6,640







LIABILITIES






NON-CURRENT LIABILITIES






Trade and other payables

706


400


767

Deferred tax

173


86


181


879


486


948

CURRENT LIABILITIES






Trade and other payables

1,476


1,030


1,556

Tax payable

53


268


158








1,529


1,298


1,714







TOTAL LIABILITIES

2,408


1,784


2,662

TOTAL EQUITY AND LIABILITIES

9,032


8,192


9,302

M WINKWORTH PLC

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the period 1 January 2024 to 30 June 2024

 


 

Share

 

 

Retained

 

Share

Premium

 

Share

option

 

Non controlling

 

 

Shareholders'


capital

 

earnings

 

account

 

reserve

 

interest

 

equity


£000's


£000's


£000's


£000's


£000's


£000's

 












Balance at 1 January 2023

64


6,212


-


51


102


6,429













Issue of share capital

1


-


179


-


-


180

Total comprehensive income

-


610


-


(51)


3


562

Dividends paid

 

-

 


(763)

 


-

 


-

 


-

 


(763)

 













Balance at 30 June 2023

65


6,059


179


-


105


6,408













NCI on acquisition of shares

-


(24)


-


-


(113)


(137)

Total comprehensive income

-


1,109


-


-


8


1,117

Dividends paid

-


(748)


-


-


-


(748)













Balance at 31 December 2023

65


6,396


179


-


                    -


6,640













Total comprehensive income

-


759


-


-


-


759

Dividends paid

-


(775)


-


-


-


(775)













Balance at 30 June 2024

65


6,380


179


-


-


6,624













 




M WINKWORTH PLC

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the period 1 January 2024 to 30 June 2024

 




(Unaudited)


(Unaudited)






Period


Period






1.1.24


1.1.23


(Audited)




To


To


Year ended




30.6.24


30.6.23


31.12.23


Notes


£000's


£000's


£000's

Cash flows from operating activities








Cash generated from operations

i


858


313


2,081

Interest paid



-


(1)


(1)

Tax paid



(375)


(353)


(670)









Net cash generated from/(used in) operating activities



483


(41)


1,410









Cash flows from investing activities








Purchase of intangible fixed assets

 

 

(82)


(127)


(229)

Purchase of tangible fixed assets



(24)


(103)


(35)

Sale of tangible



-


69


-

Sale of investments



57


-


-

Assisted acquisition support



(8)

(168)

(217)

Interest received



63

39

88









Net cash generated from/(used in) investing activities



6


(290)


(393)

















Cash flows from financing activities

 

 






New lease in year



-


119


-

Payment of lease liabilities



(106)


(203)


(214)

Interest paid on lease liabilities



(32)


(19)


(38)

Equity dividends paid



(775)


(763)


(1,511)

Purchase of non-controlling interest



-


-


(137)

Share issue



-


180


180









Net cash used in financing activities



(913)


(686)


(1,720)

















 

Decrease in cash and cash equivalents

 

 

(424)


(1,017)


(703)

Cash and cash equivalents at beginning of period



4,548


5,251


5,251

 








Cash and cash equivalents at end of period

ii


4,124


4,234


4,548

M WINKWORTH PLC

 

NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

for the period 1 January 2024 to 30 June 2024

 

i.

RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

 


(Unaudited)


(Unaudited)




Period


Period




1.1.24


1.1.23


(Audited)


To


To


Year ended


30.6.24


30.6.23


31.12.23


£000's


£000's


£000's

Profit before taxation

1,021


811


2,146

Depreciation and amortisation

288


256


531

(Reversal of) Impairment of fixed asset investments

-


7


(22)

Negative goodwill

-


-


(252)

Finance costs

32


19


39

Finance income

(63)


(34)


(88)

Gain on disposal of fixed asset

(1)


-


(9)








1,277


1,059


2,345

 

(Increase) in trade and other receivables

(385)


(246)


(269)

Increase/(decrease) in trade and other payables

(34)


(500)


5



















Cash generated from operations

858


313


2,081

 

ii.           CASH AND CASH EQUIVALENTS

 

The amounts disclosed in the cash flow statement in respect of cash and cash equivalents are in respect of these balance sheet amounts:

 


30.6.24


30.6.23


31.12.23


£000's


£000's


£000's

Cash and cash equivalents

4,124


4,234


4,548







                                                                                                                                                                

M WINKWORTH PLC

 

NOTES TO THE CONSOLIDATED INTERIM RESULTS

for the period 1 January 2024 to 30 June 2024

 

1.           ACCOUNTING POLICIES

                              

              Basis of preparation

The interim report for the six months ended 30 June 2024 and the comparative information for the periods ended 30 June 2023 and 31 December 2023 do not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  A copy of the most recent statutory accounts for the year ended 31 December 2023 has been delivered to the Registrar of Companies.  The auditor's report on these accounts was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

 

The financial information for the six months ended 30 June 2024 and 30 June 2023 is unaudited. The financial information for the year ended 31 December 2023 is derived from the group's audited annual report and accounts.

 

The annual financial statements are prepared in accordance with UK adopted International Accounting Standards (UK IFRS). The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'.

 

The accounting policies and methods of computation used in this financial information is consistent with those applied in the group's latest annual audited financial statements, except as noted below.

 

Taxation

Income tax expense has been recognised based on the best estimate of the weighted average annual effective income tax rate expected for the full financial year.

 

Deferred tax is recognised in respect of all material temporary differences that have originated but not reversed at the balance sheet date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M WINKWORTH PLC

 

NOTES TO THE CONSOLIDATED INTERIM RESULTS

for the period 1 January 2024 to 30 June 2024

 

2.          SEGMENTAL REPORTING

 

The board of directors, as the chief operating decision making body, review financial information and make decisions about the group's business and have identified a single operating segment, that of estate agency and related services and the franchising thereof.

 

The directors believe that there are two material revenue streams relevant to estate agency franchising.

 

 

6 months 2024

£000


6 months 2023

£000


12 months 2023

£000

Revenue

 

 

 

 

 

Corporate owned offices

1,512


1,134


2,695

Commissions and subscriptions due to the group under franchisee agreements

 

3,631


 

3,133


 

6,570

 

 

5,143


 

4,267


 

9,265

 

All revenue is earned in the UK and no customer represents more than 10% of total revenue in either of the years reported.

 

M WINKWORTH PLC

 

NOTES TO THE CONSOLIDATED INTERIM RESULTS

for the period 1 January 2024 to 30 June 2024

 

3.          EARNINGS PER SHARE

 

Basic and diluted earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.

 




Weighted






average






number


Per-share


Earnings


of shares


amount


£000's


000's


pence







Period ended 30.06.24






Basic EPS






Earnings/number of shares

759


12,909


5.88

Effect of dilutive securities

-


110


(0.05)







Diluted EPS






Adjusted earnings/number of shares

759


13,019


5.83







Period ended 30.06.23






Basic EPS






Earnings/number of shares

559


12,909


4.33

Effect of dilutive securities

-


217


(0.08)

 






Diluted EPS






Adjusted earnings/number of shares

559


13,126


4.25







Year ended 31.12.23






Basic EPS






Earnings/number of shares

1,668


12,814


13.02

Effect of dilutive securities

-


20


-

 






Diluted EPS






Adjusted earnings/number of shares

1,668


12,834


13.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M WINKWORTH PLC

 

NOTES TO THE CONSOLIDATED INTERIM RESULTS

for the period 1 January 2024 to 30 June 2024

 

4.          INTANGIBLE ASSETS

                           








Customer lists


Website development


 

Total


£000's


£000's


£000's

Net book value at 1 January 2023

495


411


906







Additions

-


103


103

Amortisation

(22)


(57)


(79)







Net book value at 30 June 2023

473


457


930







Additions

343


119


462

Amortisation

(29)


(63)


(92)







Net book value at 31 December 2023

787


513


1,300







Additions

-


82


82

Amortisation

(33)


(74)


(107)







Net book value at 30 June 2024

754


521


1,275

 

5.          FINANCIAL INSTRUMENTS

 

Categories of financial instruments

The group has the following financial instruments:







30.06.2024


30.06.2023


31.12.2023


£000's


£000's


£000's

Financial assets that are debt instruments measured at amortised cost






Trade receivables

885


872


976

Loans to franchisees

949


599


582

Other receivables

98


48


64







Financial liabilities measured at amortised cost






Trade payables

674


218


449

Lease liability

836


556


940

Other payables

38


27


24







Financial assets measured at fair value






Listed investments

7


26


63

 

Listed investments are valued by reference to publicly available share prices and are considered at level 1 under the IFRS 13 fair value hierarchy.

 

M WINKWORTH PLC

 

NOTES TO THE CONSOLIDATED INTERIM RESULTS

for the period 1 January 2024 to 30 June 2024

 

                 7.          RELATED PARTY DISCLOSURES

 

During the 6 months to 30 June 2024, total dividends of £394,144 (30 June 2023: £375,121) were paid to the directors.

 

8.          POST BALANCE SHEET EVENTS

 

On 10 July 2024, M Winkworth Plc declared dividends of 3p per ordinary share for the second quarter of 2024.

 

9.          INTERIM RESULTS

 

Copies of this notice are available to the public from the registered office at 13 Charles II Street, St James's, London, SW1Y 4QU, and on the Company's website at www.winkworthplc.com

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR URSNRSBUKAAR