Estate agent franchise business Winkworth has unveiled a remarkable success story for this year – increasing its sales volumes and revealing that it wants to go on a buying spree.
The firm is on target to beat its full-year profit forecasts after growing revenue by 20% in the first nine months.
This is despite low transaction volumes, especially outside London, and a drop in prices compared with the first half of the year.
Yet despite operating in a low-volume market, Winkworth has gained significant market share, with existing franchisee offices reporting a 42% increase in the number of properties sold. Six new franchisees also reported strong sales. The firm has also recently set up a country house department.
Applications from would-be franchisees have doubled over the last year, from 54 to 107.
The group now has 88 outlets in total, of which 58 are in London and 20 outside London. A further six branches are in Portugal and six in France.
In the UK, a further two offices are due to open by the end of this year, and a spokeswoman said that the target for next year is to open a further ten.
In a trading statement covering July to September 2010, the group said it is also looking to buy businesses: “Our balance sheet continues to strengthen and we are further exploring opportunities to acquire small to mid-sized chains of franchised offices to incorporate into the Winkworth brand.”
The firm, which was founded by Simon Agace and is now run by his son Dominic, floated on AIM last November. The move raised £1.1m and valued the company at just over £9m.
However, the firm has warned that low transactions will continue next year, with the market to be determined by interest rates, financing availability for first-time buyers and the impact of austerity measures, especially outside London.
The firm’s statement says: “We expect to see prices continuing to move upwards in prime markets, perhaps by a further 5%, underpinned by low interest rates and a discounted currency. Less prime markets are expected to see a consolidation in pricing levels after having retreated by 5-10% in the second half of 2010.
“In the private rental sector, we envisage an ongoing shortage of supply, created by a lack of investment over the last three years and by sales of buy-to-let properties by landlords looking to de-leverage their portfolios. This should ensure ongoing upward pressure on rents and we anticipate that, on average, these may increase by 5% in 2011.”
It adds: “We remain confident of our organic growth and, with a robust business model bolstered by the impact of new office openings, expect to continue to grow our market share.”
Winkworth defies market as revenues rise 20%
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Comments
I am level on turnover this year but last year I was up a huge amount. I suspect next year will be level with this so I will be as happy as I can be with that. With the Royal Wedding this may just inject a bit of enthusiasm next year. Let’s watch this space.
I note with interest the comment about the DPS and have advised one client who managed himself to go to the small claims court. He won.
I had one who was let off by the DPS who clearly breached specific clauses in the agreement and the arbitrator at the DPS put it down to fair wear and tear. They clearly are a bunch of brainless sh**heads who have no idea about lettings.
Any more juicy tales out there on this subject? We could start a forum on this if we only we wanted to!
What is it with people that anything approximating to good news is met with cynicsm, envy, or just sheer disbelief that a company can be 'upbeat' about the industry. Get a life!
The new office in Bath is selling very little with HUGE overheads, so imagine how much thier revenue would be up if that wasnt weighing them down.
I have had enough of being advertised at by this site. Its getting boring.
Yeah, but I bet they are still overvaluing by at least 25 - 30% like most Haart offices you care to mention.
Alright,
This story might be a bit contrived and it's got a bit of a whiff of a press release by the man that flogs franchises for them, I might be wrong but for once I could be on the money.
Jonnie
My local spicerhaart branch (Darlows) is quoting 2% and getting not much below 1.8% so bloody great, it's got the fees up in the town and I Won't complain, about time!!!!
Reeds Rains are offering 0.5% in our area desperation methods!!!
Ladies, gentlemen, prefer-no-to-discloses: okay, so it is nothing outstanding - but at least Winkworth have made the effort to release the information into the public domain! There are so many negative column inches out there, slowly eroding your livelihoods, yet you decry the one bit of positive news that makes it onto print!
How about you all follow suit - show the HPC brigade that there IS some life in the housing market after all...
I'm with the TDS and haven't had 1 single dispute since it began. Water tight independant invenories and schedule of condition is the first requsite and my lady who does the deposit returns is an ex-inventory clerk who don't take no shit from no body!! If we had £1 for every time we heard, "it was dirty when we took it" after they had signed an inventory stating PROFESSIONALLY CLEANED we wouldn't need to do the lottery!
They are hardly going to tell the truth about current trading or they would never sell any more franchises, impressive spin story that will fool those not in the know.
And with dps letting all out tenants off and paying them their deposits back even when they leave the property in a shit state dont expect to make letting profit either....
encouraging that so many are singing from the same hymm sheet, just a shame that we are reporting more tough times ahead. Must disagree with london Agent though about Bettys £9 for cheese on toast!! not many proper Yorkshire folk go there (it used to be full of estate agents a few years back, they mainly go to Weatherspoons now...after a good week)
Everyone I talk to in the industry enjoyed a bright and promising first 6 months of this year. Since the budget it has been a struggle let's be honest for a change?! A difficult end to 2010 and I would like to see what people have to say by June of next year, wonder how their 'organic growth' and 'robust business model' has been 'bolstered' by then??!!
What a nothing of a story, our EA turnover is up by 20% too, but looking at current pipelines this year compared to the same time last year it won't be up 20% next year.
I dare say that 20% up should be about the norm - it is how you have controlled your costs in 2010, and how you expect to spend your money in 2011 that will be the real difference between firms.
Although with LSL office networks like Reeds Rains currently offering half normal fees in our area, I would epxect their turnover to be way down next year.
I agree with both Monkey and Yorkshire (Betties Tea Rooms rock). Lies Lies and Statistics. Its bad and we know it is and the siege mentatality is with us nameley...stop waiting and just get on with it.
thats right our t/o a bit up on last year, but expecting a tough year next year - not as bad as 2008 levels, but not far off. Just a bit of clever spin from Winkworths, can't blame 'em. We don't hear from many agents telling us their profits are down!
Just about every agent has seen turnover for 2009/2010 increase on 2008/2009, this is due more to the huge drop in interest rates which gave the market an adrenalin hit than any particular expertise at Winkworths. Unfortunately the medicine wis wearing off and with no new simulus out there so expect Winkworths to struggle with the rest in 2011. So EAT get your facts right, winkworths havent defied the market, they are just rolling with the punches like everyone else.