Strategic expansion fuels strong revenue and profits at Winkworth

Winkworth, the London-based franchiser, has reported a pretax profit of £2m for the six months to June 30, up four-fold from £461,000 a year ago, while revenue doubled to £5.2m from £2.5m.
The company reports that the property sales market in the first half of the year was extraordinarily active.

strong demand from buyers led to record months of sales completions in March 2021, prior to the extension of the stamp duty holiday, and in June 2021, with their H1 sales revenue outstripping the whole of 2020.

Peak activity was focused on the country markets, where the desire to move away from city centres played its biggest part. It was interesting to note that, outside of the internationally reliant central London market, London also performed very strongly, with a move to more space and the easing of political uncertainty proving to be driving factors.

Winkworth says that the greatest division was between houses and flats, with property prices increasing and flats proving more difficult to sell following the withdrawal of the support of many buy-to-let investors.

Despite the stamp duty holiday and government initiatives to support 95% LTV mortgages, this sector saw limited price growth.

Similarly, the rental market was divided between house and flat demand, with houses and country locations leading the way, while London rentals suffered from an absence of international workers, students, and young professional sharers. Demand recovered as H1 progressed and people started to prepare for the return to work.

While rents in the country markets grew significantly, those in London remained behind pre-pandemic levels, albeit with early signs of a recovery towards the end of H1.

In H1 2021, gross revenues of the franchised office network of £36.4m were up by 92% (H1 2020: 18.9m). Sales income rose by 195% to £24.6m (H1 2020: £8.3m). Lettings and management rose by 11% to £11.8m (H1 2020: £10.6m), equating to a 32% lettings and management / 68% sales income split across the business at the half year (H1 2020: 55% lettings and management / 45% sales).

The first half gross revenues of £36.4m were also markedly higher than the H1 2019 result of £21.4m, with sales up by 146% and lettings and management up by 4% on the comparative period.

Dominic Agace

The company says it has seen an uplift in new franchise applications and hope to open a total of eight new franchises for the year as a whole, while it has also backed the start-up of a commercial agency, advising on investment in retail or business premises for development or conversion into residential accommodation.

Dominic Agace, chief executive officer at Winkworth, said: “While the first half of this year was marked by an exceptional level of sales activity, it also vindicated our strategic expansion in recent years into the country, enabling us to service clients not only in the buoyant London market, but also Londoners and country dwellers seeking more space or a change in environment.

“Our rental business remained strong, albeit on this occasion it was outshone by sales, and we are again encouraged by the number of applications from talented operators looking to work within our successful and well-balanced franchise model.”


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  1. Hillofwad71

    Many franchisors could learn valuable lessons from Winkworths .
      Expansion is incremental ,steady as she goes and  as a consequence their failure rate is low .
    Potential franchisees are likely to be  individuals who have already succesfully operated in a local area with a proven track record  .
    In a number of branches  momentum from H1  has  washed through July & August .H2 branch revenue for FY 20 was £27.8m where it picked up after a lockdown and a poor H1 Tooting where they keep 90% of the revenue is going great guns.
    Although generally sales will be taking a dive in H2 ,lower inventories and  a Xmas  quiet period arriving earlier  . However  rentals  improving  and picking up some of the slack,  they should hit £29m.
      In a number of areas in  London and outer boroughs  where they go head to head with Foxtons  they put them to shame picking up the higher ticket sales. Foxtons infexibility on fee charges no doubt helping.
      In Blackheath ,for example the difference is  staggering acc. to ZPL where the value of stock  either U/O or SSTC  is 7 times higher.
    Sales inventory 124 !
    U/O or SSTC: 67.
    Total Value of which £49m+
    Average Asking  Price £746,000
    Sales inventory 44
    U/O or SSTC 13 .
    Total Value of which c £6.2m.
    Average Asking Price £442,000  
    In Putney the quality of stock listed  ,there is a huge discrepancy on pricing
      Foxtons; Average asking price £627,590.  Winkworths £1,573,000 .
      Just a handful of new franchisees recruited recently ,all successful existing franchisees expanding into adjoining territories . Unlikely to be  using the following hooks  in recruiting new franchisees as a certain franchisor ,recruiting on steroids makes  
    “With around a 20% profit margin when going it alone compared to around 45% with *******, we think that the decision should really be quite an easy one!”
    “Whether you come with experience or not, we’re here to provide all the support you need to ensure your branch is a roaring ‍ success”
      “Areas are going quick and the top three hot spots are: Manchester Birmingham Sheffield”
    Are you currently lining someone else’s pockets with your sales skills and wondering how you could keep 100% of the commission you make? ”
    I listed 16 properties within 3 months  of launching with a potential  income of £72,381″ when this was in 2016  

    1. AlwaysAnAgent

      Its share price is 10% higher than it was in 2013. It was around 196p back then and has reached an all time high of 207p which isn’t a good increase for long term investors. Dividends are healthy and I agree that it is a well managed London firm. Since 2013 it has been overtaken by many of its peers.

      I like it too, although it is worth bearing in mind that other similar PLCs have grown much faster. Turnover reached £5m in the the first half of a year which has experienced the most active market for a decade.

  2. Hillofwad71

    “I like it too, although it is worth bearing in mind that other similar PLCs have grown much faster”
      Sure. Herein lies the rub . 
      Steady as  she goes or all out growth?  
    Investors know only too well from their roller coaster experience with growth with Countrywide when it was fuelled by debt how that turned  out.
    Anybody hauling  up  here at the beginning of the  year has seen a 45% increase and a decent divi  too. They won’t be  complaining too much albeit a fairly illiquid share .
        With a large lump of shares vested with the Agace family .a more conservative approach to growth  adopted but don’t forget that Winkies have pushed out of their natural habitat of London  since 2013  
      Every chance that they will  follow a similar path to Tooting and Crystal Place where they  take a full equity stake in new branches where appropriate  and secure potentially  more profit.
        There is also the added bonus  that at some stage the Agaces  shareholding comes into play and those who seek rapid growth  have a perfect vehicle to set sail.  
      Just take a look at their branches at Poringland, Norwich and Reading which are performing extremely well
    In Putney they are best in class with a very meaty £88m+ of stock either U/O or SSTC 
    H1  was indeed a one off  bumper one unlikely to be repeated  but confident that H2  will exceed  last years revenue .
      Decent dividend , a calm hand on the  rudder and still a little more mileage with the SP      


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