Winkworth announced yesterday that it has seen a sharp rise in property buyers as a number of people look for more space to work from home.
But the London-based firm also confirmed that its profit before tax dropped by 6% over the course of last year to £1.53m.
The company’s revenue was down to £6.41m, although it still declared a dividend of 6.68p per share.
In 2020, gross revenues of the franchised network of £47.7m were broadly flat year-on-year, down from £48.3m in 2019.
Sales income was unchanged at £23.8m while lettings and management fell by 2% to £23.9m, from £24.4m in 2019, producing an equal revenue split between these two activities compared to a ratio of 45% sales and 55% lettings and management at the end of H1.
Simon Agace, chairman of Winkworth, said: “Despite the challenging market conditions, we were able to open two new franchises in Long Melford and Bagshot, with a new office in Hellesdon falling into 2021. We have several further offices scheduled to open in 2021 and maintain our target of opening five new offices per year.”
He added: “Our business model was tested by extreme conditions in 2020 and proven to be very robust. The benefits of local expertise, highly motivated managers and a state-of-the-art digital platform meant that we were quick to emerge from lockdown and improve our market share.
“While challenges remain, we expect to see an increase in activity in 2021 and we are well positioned to further grow our network and respond to the evolving needs of our customers.”
It’s refreshing to see a company reporting devoid of any candy floss and hype .
A robust set of accounts coming through a pandemic with revenues broadly flat and just a small drop in profits as expected with an improved cash position.The majority of their franchisees have hit the new financial year running.
What you can glean from yesterday’s announcement is that there is a steady hand on the rudder,a chip off the old block .Any growth likely to be incremental and new franchisees carefully vetted and unlikely to be pitched for fresh meat with a hook like one of their listed brethren
“How you can turn a £4995 investment into £750,000 profit in 5 years.”
Unlikely to see Winkies going cap in hand to the bank to borrow several millions to buy ****** & Peas from Quarry Bank and watch revenue disappear out of the back door.
Steady as she goes
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Is a flat set of results a good outcome when similar firms have grown in the same period? Share price is 10p higher than it was 5 years ago and nowhere near the dizzy heights it reached before that. I get impression it’s a firm that’s paralysed rather than proactive, although they are very credible.
H, what’s your view on the share price for the other franchise firms? Winkworth and Belvoir have been on the up for 12 months. TPFG and Hunters have lost value after their deal.
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Well Foxtons who farm mostly the same fields as Winkies and share the same financial year end reported an equivalent drop in revenue .However they didn’t pay any shareholder dividends which Winkies investors have enjoyed
You are right in flagging up the discrepancy in share price .The majority of Winkies shares are owned by the Agace family which means there is very little trading. Low volumes which means the share price will react quite violentally with any movements as what has happened recently
Many investors will view them as conservative but yes certainly an opportunity for someone to arrive here and take them on a swashbuckling journey nationwide on both a franchised and non -franchised route
Should think many are eyeing the prize its just the 78 year old Jeremy Agace to tackle !.If that happens that would certainly put ar rocket under the share price
TPFG I thought were overbought with the recent rise and inherited some from the purchase of Hunters so sold out there quickly However sentiment is high so perhaps more to come with TPFG and Belvoir .Foxtons updating in a few weeks and should think that will be fairly encouraging so very happy to be invested there
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A mostly positive outlook for all concerned and I completely agree.
The home run models have been proven to be lame excuses for “businesses” and the corporates are mostly on the ropes with Foxtons and CWD being examples of this with the exception of one or two smart players. This, to me, suggests the middle grounders ie strong independents and franchise businesses will be where the real action is in the next 2 to 3 years.
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Why would Winkworths sell? Its not worth that much at £1.5m PBT though I guess there is the hope value of opening another 100 franchises. The Agace family can enjoy a decent income by owning it, plus its in their blood – how would they feel seeing a bunch of strangers run it?
The challenge for Winkworth to get more strength outside the M25 – they do well within it.
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Why would Winkworths sell ?
There are very few bite size listed agents to have a pop by all those hungry buyers out there looking for a vehicle so Winkies would attract a premium.
Tax advantages to AIM companies so maybe at 78 Jeremy Agace might want to gift his shares to wider family members who might or might not want to cash in their chips .
If they did that would put the company in play
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What’s Jeremy Agace got to do with it?! His nephew runs the show…
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Sorry typo Simon Agace (41.77% shareholder)Freudian slip! Jeremy the uncle who did cash in his chips with Mann & Co
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