Winkworth has published it Interim Results for the six months ended 30th June 2020

• Revenues down 4.15% to £2.54 million (H1 2019 restated: £2.65 million)
• Profit before taxation down 20.24% to £461k (H1 2019 restated: £578k)
• Cash balance at 30 June 2020 of £3.27 million (30 June 2019: £2.51 million)
• Rental income increased to 55% of total revenues (H1 2019: 53%)
• One new office signed up
• Dividends of 3.08p declared and paid during the period (H1 2019: 3.8p)

Dominic Agace, CEO, commented:

From our experience of reopening our offices [post-lockdown], we remain convinced that our high street presence is still the driver of our business.

Following the decisive election result in December 2019, sales activity in Q1 2020 was brisk and we saw the price declines of the latter part of 2019 reversed, supporting our view that, following weakness in recent years, pent-up activity was ready to be released once the outcome for Brexit became clearer. This came to a sudden halt with the initiation of the nationwide lockdown, with the property market being effectively put on pause for most of Q2 2020.

Despite this dramatic step, however, we have not witnessed the same reaction in the property market as in 2008 following the financial crash, which led to buyers reducing prices and transactions falling through. Instead, although the majority of transactions were put on hold, we saw fall-through rates continuing to be in line with an industry average of 20%, and where price re-negotiations took place, these averaged around 3% of the agreed price pre-lockdown.

The rentals and management side of the business was affected to a lesser extent, with lettings income proving resilient as many tenants stayed put and renewals business increased. As moves into vacant properties were still permitted, needs-based transactions continued where appropriate. Property management continued to be active as landlords looked to agents to help them through difficult negotiations with tenants and find fair compromises with those with changed circumstances looking to discuss rent reductions, pauses or early exits from their properties.

In H1 2020, gross revenues of the franchised office network of £18.9m were 11% down on H1 2019 (£21.2m).

Sales income fell by 17% to £8.2m (H1 2019: £9.9m).

Lettings and management declined by 7% to £10.6m (H1 2019: £11.4m), equating to a 55% lettings and management / 45% sales income split across the business at the half year (H1 2019: 53% lettings and management / 47% sales).

Besides the overall resilient performance in the lettings and management business, it is worth noting that, following a positive start to 2020, our country rentals business grew by 8%.

Total income from our outer London markets, which represent 60% of our business, fell by only 7%, while with international clients leaving London and all but essential travel being banned, our central London business remained the most sensitive, with a 27% reduction in income in H1.

Winkworth’s revenues fell by 4.1% to £2.54m (2019: £2.65m restated) and profit before taxation decreased by 20.2% to £461k (2019: £578k restated).

As at 30 June 2020, the Group’s cash stood at £3.27m (2019: £2.51m) and dividends of 3.08p were declared for the first half of the year (2019: 3.8p).

While the outlook for the second half of the year remains hard to predict, the Board remains committed to paying a quarterly dividend.