Winkworth shares surge as it upgrades profit guidance

Winkworth shares increased by almost 10% yesterday as the estate agency franchisor predicted annual profit ahead of market forecasts and rewarded shareholders with a special payout.

The company, which did not provide specific details of the estimates, will release full-year results for 2021 on or around 12 April.

The firm’s share price rose by 9.3% to 207 pence yesterday.

The company said sales activity in Q4 2022 remained brisk, with continued interest in relocation post the heightened level of transactions triggered by the stamp duty holiday, which ended in September. For the year as a whole, their sales agreed were 13% higher than in 2020 and 42% above those of 2019.

The firm’s rental business experienced some normal seasonal slowdown after several months of intense activity but remained strong in London.

Prime central London continues to show signs of recovery, although the outlook for international interest remains dependent on travel restrictions.

Two more offices were opened, bringing the total number of offices opened in 2021 to six. Five of these offices were opened by existing franchisees and Winkworth expects their local networks to continue to grow. Following the strength in the market, Winkworth also expect to see an increase in approaches for franchises from new applicants.

Since their trading update of 11 November 2021, the business has continued to be strong. Winkworth’s full year revenues have again exceeded management expectations and pre-tax profits are expected to be ahead of market forecasts at the time of the last trading update.

For the current year, with a good outlook for sales and an improved rental market in London, Winkworth says it looks forward to the continued underlying growth of the business.

Winkworth also announced a quarterly dividend of 2.7 pence per share, 50% higher than 1.8p in the previous year, as well as a special dividend of 3.8p share. Shareholders can expect the dividend payment on February 17, 2022 for shares purchased before next Thursday.

Dominic Agace, chief executive officer of Winkworth, commented: “We are conscious of the rising interest rate environment, but the cost of finance remains at a record low and we believe that there is still pent up desire from households to relocate. Buyer demand over the end of year break has been reported at record levels and sellers finally seem to be returning to the market. While this may hold back the solid growth in prices of the last two years, it bodes well for the number transactions and we expect another busy year.”

 

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