Winkworth’s trading statement for the first half of 2019 show the company’s revenue and pre-tax profit both dipping slightly - but improved lettings performance and new office openings give a picture of a company still on the rise.
"While the sales market continues to be undermined by political and economic uncertainty, our ship remains steady and we look forward to an eventual revival in activity. In the meantime, I am delighted by the ongoing growth in our lettings and management business as our franchisees have worked tirelessly to build this side of the business. We are confident of our proposition and very pleased to see continuing high numbers of potential new franchisees applying to join the group” says chief executive Dominic Agace.
Over the first six months of the year gross revenues of the franchised office network of £21.4m were one per cent ahead the same period of 2018.
But sales income fell eight per cent to £10.0m; however, lettings and management rose by 10 per cent to £11.4m, equating to a 53/47 lettings/sales split across the business.
In central London, where revenues are most sensitive to the Brexit turmoil, income was down by 10 per cent on a year ago, but the firm says that since May, this market has picked up and sentiment improved.
In Winkworth’s country markets, rental income rose 16 per cent and sales income was up 15 per cent.
The company signed three new franchises and opened two, in Leigh on Sea and Southwold, with another two expected to open before the end of 2019.
“We continue to experience strong interest in new franchises, with applicants slightly down at 121 in H1 2019 versus 134 in H1 2018 but still significantly up on H1 2016 (49) and H1 2017 (57)” says the company’s trading statement to shareholders.
“From an operational point of view, we look to continue to both evolve our digital offering through new services and to bring a new generation of talent on board. We see an opportunity to attract franchisee managers into the business as constrained earnings at some competitors enhance the attraction of equity ownership” says Agace.
“Where we have done this to date, we have seen significant uplifts in the performance of offices and we are taking full advantage of the earnings opportunities in some of the key areas we cover, while also enhancing our brand. We look forward to welcoming more new managers on board over the coming months and to supporting some of the best talent in the industry through company loans or, in very selective cases, equity participation” he adds.