Final Results

M Winkworth Plc

("Winkworth" or the "Company" or the "Group")

Audited final results for the year to 31 December 2024

Notice of Investor Presentation

Notice of Annual General Meeting

M Winkworth plc, the leading franchisor of real estate agencies, is pleased to announce its audited results for the year ended 31 December 2024.

 Highlights for the year:

Financial performance in 2024 in line with management expectations.

• Revenues of £10.79 million up by 17% on 2023 (2023: £9.27 million).

• Profit before taxation up 10% to £2.36 million (2023: £2.15 million).

• Strong balance sheet with year-end cash balance of £4.09 million (2023: £4.55 million) and with no debt.

• Full year dividends of 12.3p per ordinary share declared (2023: 11.7p per ordinary share), an increase of 5% on the prior year.

• Three new offices opened in the year (2023: 4) and five franchises resold to new operators.

• Franchised office network revenue up 12% at £64.7 million (2023: £57.8 million).

- Network sales revenue up 18% to £32.7 million (2023: £27.6 million).

- Network lettings revenue up 6% to £32.0 million (2023: £30.2 million).

• Sales revenues 51% of total revenues (2023: 48%).

Dominic Agace, CEO of the Company, commented: "While our lettings and management made further good progress in 2024, the strong performance of the sales market played to Winkworth's skills and advantage. Almost half of our franchises and the vast majority of our London offices are now in the top three slot by market share in their local area and our performance figures continue to improve. Our portfolio management strategy is working well with the new talent that we are attracting adding to the strength of our brand and reputation."

Investor presentation

Dominic Agace, CEO, and Andrew Nicol, CFO, will present the final audited results for the year to 31 December 2024 via the Investor Meet Company platform on 23 April 2025 at 11.00 am.

The presentation is open to all existing and potential shareholders who can sign up and register to participate for free at:

https://www.investormeetcompany.com/m-winkworth-plc/register-investor

Investors who already follow Winkworth on the Investor Meet Company platform will automatically be invited.

Notice of Annual General Meeting

The Company's Annual General Meeting ("AGM") will be held at The Lansdowne Club, 9 Fitzmaurice Place, London, W1J 5JD on Thursday, 22 May 2025 at 10.30 am.

The Notice of AGM will be made available on the Company's website at: www.winkworthplc.com.

Printed copies of the 2024 Annual Report and Accounts will be mailed to shareholders shortly, together with the Company's Notice of AGM. 

 For further information please contact:

M Winkworth Plc Tel : 020 7355 0206

Dominic Agace (Chief Executive Officer)

Andrew Nicol (Chief Financial Officer)

Milbourne (Public Relations) Tel : 07921 881800

Charlotte McMullen

Shore Capital (NOMAD and Broker) Tel : 020 7408 4050

 David Coaten

 Henry Willcocks

 George Payne

 About Winkworth

Winkworth is the leading London franchisor of residential real estate agencies with a pre-eminent position in the mid to upper segments of the sales and lettings markets. The franchise model allows entrepreneurial real estate professionals to provide the highest standards of service under the banner of a long-established brand name and to benefit from the support and promotion that Winkworth offers.

Winkworth (TIDM: WINK) is admitted to trading on the AIM Market of the London Stock Exchange.

For further information please visit: www.winkworthplc.com

Chair's Statement

As this year we celebrate 190 years of Winkworth, I am very grateful for the heritage of which I have been the steward for over half a century. With this milestone in mind, I hope shareholders will appreciate a slightly different Chair's report from normal as I reflect on what makes your Company successful, and how the future bodes for us. 

Apart from this long history, many franchisee family successes and histories have been entwined with the Winkworth growth story, and it is so pleasing to see these families grow with the Winkworth franchise and even in our franchisor office. We are fortunate to have many longstanding members of the Company.

Historically, Winkworth has always balanced instructions with buyers. We aim not to take on more properties than we believe we can service and, to a certain extent, that has meant that every time an office reached its natural optimum turnover, the franchisee has been encouraged to open a new office to service an adjacent popular area. 

Winkworth has, therefore, almost always expanded organically, driven by market share and product. The classic example of this is our St. John's Wood's franchisee expanding into Maida Vale and West Hampstead, and now with plans to launch into two neighbouring territories. The same has happened in Exeter, expanding from there to Crediton and Tiverton, and now separating the central office into St. Leonards and St. Thomas's in order to service these markets better. Similarly our Putney franchisee, one of our longest-standing, has added West Putney to the Southfields and main Putney offices, helping the team to expand. Winkworth's growth is through people and market share. 

We need products to service our buyers and franchisees tend to expand within their local areas to gain products to sell, and we help that expansion. We plan to keep a balance between not going after every single instruction in each area with offering the best selection. This benefits vendors and also attracts the most buyers.

These principles are evident in our achievements: £3.4 billion worth of property sold last year; 175,000 registered applicants, a database of over four million contacts; and more than four million visits to our website. Our 100 offices meet these varying needs with Central London having fewer instructions per office than outer London or the country, and some areas in the UK have a low turnover as residents in those areas tend to stay for life. 

I have always observed that estate agency is a business of scale. It is not about having five properties to sell and 20 buyers, it is about having maybe 50 properties to sell that attract perhaps 500 buyers. The professionals handling these properties have to work as teams and, to meet customers' expectations, administrators are often as important as front-line salespeople. Winkworth likes to please its customers and build the very long-term relationships that help its expansion. The franchise model of long-term proprietors is a well-suited system to this goal. As one of our new franchisees commented to me: "Not only have I got my personal business, but I have got yours as well".

Having said that, we have well-developed plans to meet future market changes and challenges. We are spending substantial sums of money helping our franchisees use a dashboard of tools that will be incredibly useful to the high-volume offices without overwhelming the smaller ones.

Meanwhile rentals, when done well, need a special set of skills because if that side of the business shrinks or becomes more difficult it can become less profitable. It is, therefore, a case of growing efficiency and building property legal skills to maintain profit levels.

A couple of years ago I was asked why we were not diving into the rental market. My response was that while the lettings and management business will always be important to Winkworth, rental portfolios remain fairly static and do not rush to change. We would only look to buy in order to secure a growth point into sales. In our opinion, sales agency has always offered greater profitability and better reflects selling skills, and the public is attracted to the best operators. Our rentals and management business has in the past grown to up to 50% of Group turnover, but sales are now dominating and I am sure that over the long-term there will be some shrinkage in rentals as the trend of landlords exiting the business continues.

How would that affect Winkworth? There may be some impact on our business, but we would expect it to be compensated by increased sales and growth of market share as some competitors may have focused too much on rentals and diluted their sales teams. It will be interesting to see how this plays out, but Winkworth has seen many changes before and I believe we can trust in our own dynamism to keep our business ahead of the curve.

Simon AgaceNon-Executive Chair15 April 2025

CEO's Statement

As buyers sensed an end to the interest rate tightening cycle and the cost of mortgages fell, in 2024 we saw buyers (21% ahead of 2023) and sellers (20% ahead of 2023) brush aside previous electoral concerns both in the UK and internationally and expedite home moves that had been delayed by the cost of living crisis. A lifting of these uncertainties, combined with further market share gains, resulted in Winkworth's sales agreed increasing by 23% on 2023. 

In the second half of 2024, activity remained resilient despite the impact of the UK Government's autumn statement and the subsequent introduction of new tax measures such as the increase in national insurance. As over time higher rates of stamp duty and reduced mortgage interest rate relief have discouraged buy to let and speculative investors, the UK market has become increasingly needs-based and more resilient to external uncertainty. Increased costs of finance, high rental prices, changes to the taxation of pensions and school fees, and the higher cost of living are all factors that add to the motivation of both buyers and sellers to transact.

In 2024, our network sales revenue rose by 18% to £32.7m (2023: £27.6m). London led the way with sales income up by 22% across the city as a whole and, within that, Central London sales revenue increasing by 26%. Backed by our marketing campaigns and state-of-the-art operations, I am delighted that the hard work and professionalism of our franchisees led to Winkworth's market share of new listings growing the fastest of the top five agencies in London, while our market share of sales agreed ("SSTC") grew by more than any of the other top ten agents in London¹.

In the lettings and management business, increasing costs for landlords continued to see them exiting the sector, leading to a reduction in supply of properties to let. With rents at record levels, we have seen affordability ceilings reached and increasing trends in room sharing, with young professionals choosing cheaper areas to rent or staying at home longer, and the bank of mum and dad lending to make buying affordable. These developments have led to a reduction in tenant demand, and in 2024 we saw a 5% decline in tenants registered compared to 2023. 

Despite this reduction in registrations and a flattening of rental prices, we achieved lettings and management network revenue growth of 6% in 2024 to £32.0m (2023: £30.2m). This was led by the country markets where we saw an increase in revenues of 10%, driven by newer Winkworth businesses growing rapidly and supported acquisitions bolstering existing franchisee portfolios. The stickier property management revenue grew by 10% year-on-year compared to overall letting revenue excluding property management income which grew by 3% in 2024 to £16.4m (2023: £15.9m).

In 2024, gross revenues of the franchised network of £64.7m were 12% higher year-on-year (2023: £57.8m), with an almost equal split in income between Sales and Letting and Management compared to a 48:52 revenue split in 2023.

Winkworth's revenues of £10.79m were 17% higher (2023: £9.27m) and profit before taxation rose by 10% to £2.36m (2023: £2.15m). The Group's cash position at year end stood at £4.09m (2023: £4.55m) with no debt. Dividends of 12.3p per ordinary share were declared for the full year (2023: 11.7p per share).

During the course of 2024, we opened three new offices and resold five franchises to new operators. At the end of the period under review the Group consisted of 100 offices. We ended the year with a strong pipeline of nine potential resales and six new openings. In 2025, we have already opened two new offices.

We are forging ahead with our plan to invest in our platform and bring on new talent to position us as a top three agency in each local area we operate in within London. We believe that this focus will ensure our franchisees are profitable through the various cycles of the property market and well positioned to continue to invest in their businesses. To this end, we replaced our previously closed Clapham office with a new operator in 2024 and resold our flagship Knightsbridge office. We are accelerating our onboarding of talent and I believe that a new generation of operators will secure the health of the network and its organic growth going forward. We will continue to offer new options for good people to join Winkworth.

In 2024, our own-equity offices made significant progress, with revenue increasing by 27%. With our help, the manager in Tooting moved to acquire neighbouring franchises for his own account and our Tooting office was temporarily impacted by the transition to a new team, affecting its profitability. This new team is now fully integrated and, with stable management across the own-equity offices, we expect to see strength in 2025 as Tooting returns to form and the newer offices mature into profitability.

After intensive repositioning we would expect to see most of our own-equity offices ranking as top three operators in 2025. Where we can find star quality, we will continue to review new opportunities for this initiative and, as offices hit maturity, consider reducing our equity position to enable management to increase their own stakes or acquire the business. This will enable us to recycle capital into new opportunities where we can boost our franchise fee return and generate additional profits.

Elsewhere, our Development and Commercial Investments business broke even last year but continues to face uncertain market conditions. Promising signs are coming from our recently launched new homes business.

OUTLOOK

We see the rejuvenated sales market remaining firm in 2025 and into 2026, with a needs-driven property market leading to greater activity and more properties becoming available as households re-align their sights and adjust to higher taxation and inflationary costs. We see a broadly balanced picture between buyers and sellers in 2025 and so anticipate that price increases of around 3% will be in line with the general rate of inflation. We expect activity to be heightened in London as a return to the office motivates buyers to seek properties there.

With the renters' rights bill coming into statute we envisage that some landlords, already burdened with losing part of the mortgage interest tax relief and higher costs of finance, will not wish to continue to hold their investments. However, with affordability ceilings having in many cases been reached, we do not expect further rapid rises in rents but rather a reversion to these tracking wage inflation, as prospective tenants avoid entering the market or change location to reduce their costs.

With these changes we see an opportunity to continue to grow our lettings portfolios as landlords look for greater guidance in the face of tighter regulation. With weaker repossession rights, the need for higher quality tenants will mean that more private landlords will look to use agents. Additionally, increased regulation will push more independent letting agencies to exit the business, generating opportunities for our supported acquisition programme which provides funding to franchisees that wish to acquire portfolios to bolster their business.

Note¹: based on postcodes where Winkworth has listed a property - Source: TwentyEA

Dominic Agace

Chief Executive Officer

15 April 2025

M WINKWORTH PLC

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2024

M WINKWORTH PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2024

M WINKWORTH PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2024

WINKWORTH PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024 

1. STATUTORY INFORMATION

M Winkworth Plc is a public company, registered in England and Wales and quoted on AIM. The Company's registered number and registered office address can be found on the Company Information page of the Annual Report.

2. ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared under the historical cost convention, with the exception of financial instruments as set out below, and in accordance with UK adopted International Accounting Standards. The financial statements are presented in pound sterling, which is also the company's functional currency. The following principal accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements.

Going concern

The Directors have, at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the accounts.

Revenue

Revenue represents the value of commissions and subscriptions due to the Group under franchise agreements, together with the value of fees earned by its subsidiary lettings business. Revenue in respect of commissions due on house sales is recognised at the point of the relevant property sale having been completed by the franchisee. Revenue in respect of commissions due on lettings, property management and administration services is recognised in the period to which the services relate. The Group earns a straight 8% by value on all sales and lettings income generated by the franchisees.

In Tooting Estates Limited, Crystal Palace Estates Limited and Lumley 1 Limited, revenue in respect of commissions due on house sales is recognised on completion. Revenue in respect of commissions due on lettings and property management is recognised over the life of the rental agreement.

3. SEGMENTAL REPORTING

The board of directors, as the chief operating decision making body, review financial information and make decisions about the Group's business and have identified a single operating segment, that of estate agency and related services and the franchising thereof.

The directors believe that there are two material revenue streams relevant to estate agency franchising.

4. TAXATION

Analysis of tax expense

Factors affecting the tax expense

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

5. DIVIDENDS

6. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

7. CALLED UP SHARE CAPITAL

8. RESERVES

Retained earnings are earnings retained by the Company not paid out in dividends.

Share premium is the premium paid on shares purchased in the Company.

Other reserves are the fair value equity components recognised over the vesting period of share-based payments.

9. POST BALANCE SHEET EVENTS

On 15 January 2025, M Winkworth Plc declared a dividend of 3.3p per share for the fourth quarter of 2024.

On 9 April 2025, M Winkworth Plc declared a dividend of 3.3p per ordinary share for the first quarter of 2025

10.  FINANCIAL INFORMATION

The financial information contained within this announcement for the year ended 31 December 2024 is derived from but does not comprise statutory financial statements within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2023 have been filed with the Registrar of Companies and those for the year ended 31 December 2024 will be filed following the Company's annual general meeting. The auditors' reports on the statutory accounts for the years ended 31 December 2024 and 31 December 2023 are unqualified, do not draw attention to any matters by way of emphasis, and do not contain any statements under section 498 of the Companies Act 2006.

11.  ANNUAL REPORT AND ACCOUNTS

Copies of the annual report and accounts for the year ended 31 December 2024 together with the notice of the Annual General Meeting to be held at The Lansdowne Club, 9 Fitzmaurice Place, London W1J 5JD on 22 May 2025, will be posted to shareholders shortly and will be available to view and download from the Company's website at www.winkworthplc.com