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WINK M Winkworth Plc

162.50
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
M Winkworth Plc LSE:WINK London Ordinary Share GB00B4TT7L53 ORD 0.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 162.50 155.00 170.00 165.00 162.50 162.50 0.00 08:00:07
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Real Estate Agents & Mgrs 9.31M 1.95M 0.1511 10.75 20.98M

M Winkworth Plc Half-year Report (5619Q)

13/09/2017 7:00am

UK Regulatory


M Winkworth (LSE:WINK)
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TIDMWINK

RNS Number : 5619Q

M Winkworth Plc

13 September 2017

M Winkworth Plc

Interim Results for the Six Months ended 30 June 2017

M Winkworth Plc ("Winkworth" or the "Company") is pleased to announce its

Interim Results for the six months ended 30 June 2017

Highlights for the period

   --     Revenues down 7.6% to GBP2.54m (2016: GBP2.75m) 
   --     Profit before taxation down 25.2% to GBP0.54m (2016: GBP0.72m) 
   --     Cash generated from operations GBP0.77m (2016: GBP0.44m) 
   --     Cash balance as at 30 June 2017 GBP3.00m (2016: GBP2.84m) 
   --     Rental income increased to 45% of total revenues 
   --     Seven new franchisees signed 
   --     Dividends of 3.6p declared and paid during the period (2016: 3.5p) 

Dominic Agace, Chief Executive Officer of the Company, commented:

"With these results we are pleased to have demonstrated our ability to adapt to challenging market conditions and maintain our dividend payment. Although the market is likely to remain unsettled for the remainder of the year, we expect to see franchises that have converted to the Winkworth brand growing their market share by plugging into our evolving platform and new franchises approaching us to benefit from the greater rewards of equity ownership."

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 : 07903 802545

Tim Draper

   Stockdale Securities Ltd (NOMAD and Broker)                            Tel : 020 7601 6100 

Robert Finlay

Ed Thomas

Henry Willcocks

Chairman's Statement

We are pleased to report some success in maintaining profitability and growing our franchises during the period under review. Notable achievements were an increase in rental turnover and the signing of seven new offices, which gives us a total number of offices at the end of the reporting period of 96.

Our robust estate agency platform is attracting an increasing number of new franchisees as well as owner upgrades in some of our older, established franchises such as Fulham. Our patience in waiting for a downturn before significantly expanding our number of offices is being rewarded, and this expansion has been achieved without diluting cash resources in the first half of the year - my congratulations to the management team.

We continue to focus on delivering the best services for our franchisees to enable them to maintain top service levels to vendors, buyers, landlords and tenants, and in order to maintain the growth and goodwill attached to the Winkworth brand. The successful roll-out of our centralised services, which now include an evolving internet platform and back-up office services for our franchises, is proving to be a powerful competitive advantage.

Work has continued on building our self-developed online client portal and customer service system which, on completion, will fully integrate sales, rentals and management allowing our clients and offices to conduct more of their business through our website. Our franchisees have diverse requirements, but we have been able to include them into the development of the system. Furthermore, by developing this system ourselves we have provided them with additional security and savings. I would like to thank our internal development team and franchisees for creating what we believe will be the leading platform for independent agencies.

Even though an uncertain outlook for sales volumes continues to weigh on the market, we are confident that our business model will lead to a return to growth in this sector. Meanwhile, we are delighted with the organic growth of our rentals business.

Although markets remain slow, based on the performance in the first half of the current financial year, and recent trading, we expect full year results to be in line with management's expectations. Looking forward our net cash position and established brand puts us in a strong position to take on whatever opportunities arise.

Simon Agace

Non-Executive Chairman

13 September 2017

CEO's Statement

Comparisons between this half year's performance and H1 2016 are complicated by the introduction of higher stamp duty for buy-to-let and second property owners in April 2016, which led to a spike in transactions, distorting sales performance from the underlying market environment. As a result, 2016 was the first year in which our second half was weaker than the first. We expect our seasonal performance to revert to normal in 2017 after a 18% year-on-year fall in the number of transactions in H1.

Excluding this comparison, the sales market has remained unsettled, with political and economic uncertainty and affordability issues post stamp duty changes weighing on transactions. The exception in the first half was central London, where price depreciation of some 15% over the last two years and international buyers attracted by a cheaper pound led to renewed interest, underpinning prices and increasing activity. Winkworth's gross sales income in this sector rose by 7% year-on-year.

Prices have remained steady in the more domestically-focused outer London markets, underpinned by low interest rates and high employment, but affordability issues continue.

Despite price reductions in central London, which accounts for approximately 25% of our total London sales, our average fees charged for a property sale were flat as a result of our average property price continuing to grow on the strength of the Winkworth brand. The average price of a Winkworth property sold increased by 2%, rising to GBP750,000 in London and GBP594,000 across the UK.

With the sales market subdued, our investment in the lettings and management side of the business has continued to pay dividends. Despite an increase in supply post the buy-to-let mini boom weighing on rental prices, lettings and management revenue grew by 4% and increased from 40% in H1 2016 to 45% of total gross revenue for the franchised office network. Of particular note was the strengthening of our property management business. This now accounts for 37% of our letting revenue compared to 34% this time last year, as increased training and our investment in improved procedures are bolstered by a heightened focus by franchisees on the value of this revenue stream. We see sustained growth in our lettings and management business as rental prices level out following the increase in supply.

In H1 2017, gross revenues of the franchised office network fell by 9% to GBP21.4m (GBP23.6m), with sales falling 18% to GBP11.7m (GBP14.3m), lettings down 2% to GBP6.0m (GBP6.1m) and property management up 15% to GBP3.7m (GBP3.2m).

Whilst Winkworth's revenues fell by 8% to GBP2.54m (GBP2.75m), and profit before taxation was 25% lower at GBP540k (GBP722k). Cash generated from operations increased by 74% to GBP766k (GBP439k), and the cash balance as at 30 June 2017 was GBP3.00m (2016: GBP2.84m). The Company remains debt-free.

Dividends of 3.6p were declared for the period (3.6p) and continue to be paid quarterly.

Against a background of a low transactional market we continue to attract high quality new franchise applicants and convert existing quality businesses to the Winkworth brand in markets that are complementary to our existing network. Start-up franchisees are typically successful managers whose earnings are depressed by current market conditions and who are looking to own equity in their own business, with the opportunity to secure their income longer term and no longer be hamstrung by the corporate requirements of larger well-known brands dragging down their earnings potential.

Existing businesses may be lettings agencies looking to develop into sales to offset the proposed loss of tenancy administration fees, or estate agencies in prime locations looking to compete for higher value properties and thus raise their profitability. In each case, new franchisees are able to add value through an enhanced level of service and, ultimately, the prices that their personal skill set and the Winkworth platform can help their clients achieve.

We have signed seven offices this year in Kingsbury, Milford On Sea, Cheltenham, Surbiton, Sunningdale, Dartmouth and Brixham, three of which were operational under the Winkworth brand in the first half. This compares to two new offices this time last year. With ongoing interest from exciting applicants, we expect this trend to continue and already have a number of new franchised offices lined up for launch in January 2018.

In order to attract candidates we have continued to invest in the platform. We launched a recruitment department in June 2017 to help franchisees find quality employees to enhance both their businesses and the overall Winkworth profile.

Our digital plan is now well underway, with a new website having been successfully launched in February and work in progress to develop improved functionality for sales and lettings clients. This will improve both the transparency of the Winkworth service and the capability to link into it, as well as providing added support to our franchisees as they use their skills and personal interaction to add value to their clients' property transactions and management requirements.

Outlook

We expect prices to be supported whilst interest rates remain low and employment high, but for the number of transactions to remain subdued on the back of an unpredictable economic outlook. The exception to this is central London, where we anticipate that transactions will continue to improve on the back of better sentiment and that prices have bottomed out.

In the rental market we expect prices to stabilise, after having fallen in H2 2016 and H1 2017, and activity to continue to grow as the post stamp duty glut is absorbed.

Based on the performance in the first half of the current financial year, and recent trading, we expect that full year results should be in line with management's expectations.

With current market conditions set to continue for the remainder of the year we expect to see franchises that have converted to the Winkworth brand growing their market share by plugging into our evolving platform, and new franchises approaching us to benefit from the greater rewards of equity ownership. This combined with the Company's strong financial position provides us with an ongoing positive outlook for growth of the network.

Dominic Agace

Chief Executive Officer

13 September 2017

M WINKWORTH PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the period 1 January 2017 to 30 June 2017

 
                                                        (Unaudited)   (Unaudited) 
                                                          Period        Period 
                                                          1.1.17        1.1.16      (Audited) 
                                                                                      Year 
                                                            To            To          ended 
                                                          30.6.17       30.6.16     31.12.16 
                                                         GBP000's      GBP000's     GBP000's 
 
          CONTINUING OPERATIONS 
          Revenue                                             2,544         2,746       5,566 
 
          Cost of sales                                       (661)         (667)     (1,477) 
                                                       ------------  ------------  ---------- 
 
          GROSS PROFIT                                        1,883         2,079       4,089 
 
          Administrative expenses                           (1,376)       (1,391)     (2,743) 
                                                       ------------  ------------  ---------- 
 
          OPERATING PROFIT                                      507           688       1,346 
 
          Finance costs                                           -             -           - 
          Finance income                                         33            34          71 
                                                       ------------  ------------  ---------- 
 
          PROFIT BEFORE TAXATION                                540           722       1,417 
 
 
          Taxation                                             (99)         (148)       (291) 
                                                       ------------  ------------  ---------- 
 
          PROFIT FOR THE PERIOD                                 441           574       1,126 
 
          OTHER COMPREHENSIVE INCOME                              -             -           - 
                                                       ------------  ------------  ---------- 
 
          TOTAL COMPREHENSIVE INCOME 
           FOR THE PERIOD                                       441           574       1,126 
                                                       ============  ============  ========== 
 
 
          Earnings per share expressed 
          in pence per share:                       3 
          Basic                                                3.46          4.52        8.84 
          Diluted                                              3.29          4.51        8.84 
                                                       ============  ============  ========== 
 
 
 

M WINKWORTH PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 June 2017

 
                                         (Unaudited)       (Unaudited)       (Audited) 
                                         30.06.2017        30.06.2016        31.12.2016 
                  Notes                   GBP000's          GBP000's          GBP000's 
 ASSETS 
 NON-CURRENT ASSETS 
 Intangible assets                  4            734               897              777 
 Property, plant and equipment                    99               140              115 
 Investments                                       7                 7                7 
 Trade and other receivables                     619               735              716 
 Deferred tax                                      -                 -                - 
                                        ------------      ------------      ----------- 
 
                                               1,459             1,779            1,615 
                                        ------------      ------------      ----------- 
 
 CURRENT ASSETS 
 Trade and other receivables                   1,820             2,002            1,348 
 Tax receivable                                  212                 -               69 
  Cash and cash equivalents                    3,005             2,838            2,972 
                                        ------------      ------------      ----------- 
 
                                               5,037             4,840            4,389 
 TOTAL ASSETS                                  6,496             6,619            6,004 
                                        ============      ============      =========== 
 
 EQUITY 
 SHAREHOLDERS' EQUITY 
 Share capital                                    64                64               64 
 Share premium                                 1,793             1,793            1,793 
 Share option reserve                             51                51               51 
 Retained earnings                             3,539             3,462            3,556 
                                        ------------      ------------      ----------- 
 
 TOTAL EQUITY                                  5,447             5,370            5,464 
                                        ------------      ------------      ----------- 
 
 LIABILITIES 
 NON-CURRENT LIABILITIES 
 Deferred tax                                      7                21               16 
                                        ------------      ------------      ----------- 
 
 CURRENT LIABILITIES 
 Trade and other payables                      1,042             1,193              524 
 Tax payable                                       -                35                - 
                                        ------------      ------------      ----------- 
 
                                               1,042             1,228              524 
                                        ------------      ------------      ----------- 
 
 TOTAL LIABILITIES                             1,049             1,249              540 
                                        ------------      ------------      ----------- 
 TOTAL EQUITY AND LIABILITIES                  6,496             6,619            6,004 
                                        ============      ============      =========== 
 
 

M WINKWORTH PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the period 1 January 2016 to 30 June 2017

 
                         Share     Retained    Share                      Share     Shareholders' 
                                               option 
                        capital    earnings   reserve                    premium       equity 
                        GBP000's   GBP000's   GBP000's                   GBP000's     GBP000's 
 Balance at 1 
  January 2016                64      3,334         51                      1,793           5,242 
 
 Total comprehensive 
  income                       -        574          -                          -             574 
 Share-based payment           -          -          -                          -               - 
 Dividends paid                -      (446)          -                          -           (446) 
                       ---------  ---------  ---------                  ---------  -------------- 
 
 Balance at 30 
  June 2016                   64      3,462         51                      1,793           5,370 
                       ---------  ---------  ---------                  ---------  -------------- 
 
 Total comprehensive 
  income                       -        552          -                          -             552 
 Issue of share                -          -          -                          -               - 
  capital 
 Share-based payment           -          -          -                          -               - 
 Dividends paid                -      (458)          -                          -           (458) 
                       ---------  ---------  ---------                  ---------  -------------- 
 
 Balance at 31 
  December 2016               64      3,556         51                      1,793           5,464 
                       ---------  ---------  ---------                  ---------  -------------- 
 
 Total comprehensive 
  income                       -        441          -                          -             441 
 Dividends paid                -      (458)          -                          -           (458) 
                       ---------  ---------  ---------                  ---------  -------------- 
 
 Balance at 30 
  June 2017                   64      3,539         51                      1,793           5,447 
                       =========  =========  =========                  =========  ============== 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

M WINKWORTH PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

for the period 1 January 2017 to 30 June 2017

 
                                             (Unaudited)   (Unaudited) 
                                               Period        Period 
                                               1.1.17        1.1.16      (Audited) 
                                                 To            To        Year ended 
                                               30.6.17       30.6.16      31.12.16 
                                   Notes      GBP000's      GBP000's      GBP000's 
 Cash flows from operating 
  activities 
 Cash generated from 
  operations                          i              765           439        1,569 
 Interest paid                                         -             -            - 
 Tax paid                                          (250)         (201)        (453) 
                                            ------------  ------------  ----------- 
 
 Net cash from operating 
  activities                                         515           238        1,116 
                                            ------------  ------------  ----------- 
 
 Cash flows from investing 
  activities 
 Purchase of intangible 
  fixed assets                                      (54)          (32)        (122) 
 Purchase of tangible 
  fixed assets                                       (3)         (124)        (128) 
 Sale of property, plant 
  & equipment                                          -             -            - 
 Interest received                                    33            34           71 
                                            ------------  ------------  ----------- 
 
 Net cash used in investing 
  activities                                        (24)         (122)        (179) 
                                            ------------  ------------  ----------- 
 
 
 Cash flows from financing 
  activities 
 Share issue                                           -             -            - 
 Equity dividends paid                             (458)         (446)      (1,133) 
                                            ------------  ------------  ----------- 
 
 Net cash used in financing 
  activities                                       (458)         (446)      (1,133) 
                                            ------------  ------------  ----------- 
 
 
 
   Increase/(decrease) 
   in cash and cash equivalents                       33         (330)        (196) 
 Cash and cash equivalents 
  at beginning of period                           2,972         3,168        3,168 
                                            ------------  ------------  ----------- 
 
 Cash and cash equivalents 
  at end of period                   ii            3,005         2,838        2,972 
                                            ============  ============  =========== 
 

M WINKWORTH PLC

NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

for the period 1 January 2017 to 30 June 2017

 
i.  RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH 
     GENERATED FROM OPERATIONS 
 
 
                                   (Unaudited)   (Unaudited) 
                                     Period        Period 
                                     1.1.17        1.1.16      (Audited) 
                                                                 Year 
                                       To            To          ended 
                                     30.6.17       30.6.16     31.12.16 
                                    GBP000's      GBP000's     GBP000's 
 Profit before taxation                    540           722       1,417 
 Depreciation and amortisation             117           130         368 
 Share-based payments                        -             -           - 
 Finance costs                               -             -           - 
 Finance income                           (33)          (34)        (71) 
                                  ------------  ------------  ---------- 
 
                                           624           818       1,714 
 (Increase) in trade and other 
  receivables                            (377)         (770)        (97) 
 Increase/(decrease) in trade 
  and other payables                       518           391        (48) 
                                  ------------  ------------  ---------- 
 
 
 Cash generated from operations            765           439       1,569 
                                  ============  ============  ========== 
 
   ii.          CASH AND CASH EQUIVALENTS 

The amounts disclosed in the cash flow statement in respect of cash and cash equivalents are in respect of these balance sheet amounts:

 
                              30.6.17    30.6.16    31.12.16 
                              GBP000's   GBP000's   GBP000's 
 Cash and cash equivalents       3,005      2,838      2,972 
                             =========  =========  ========= 
 
 

M WINKWORTH PLC

NOTES TO THE CONSOLIDATED INTERIM RESULTS

for the period 1 January 2017 to 30 June 2017

   1.           ACCOUNTING POLICIES 

Basis of preparation

The interim report for the six months ended 30 June 2017 and the comparative information for the periods ended 30 June 2016 and 31 December 2016 do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the most recent statutory accounts for the year ended 31 December 2016 has been delivered to the Registrar of Companies. The auditor's report on these accounts was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

The financial information for the six months ended 30 June 2017 and 30 June 2016 is unaudited. The financial information for the year ended 31 December 2016 is derived from the group's audited annual report and accounts.

The annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'.

The accounting policies and methods of computation used in this financial information is consistent with those applied in the group's latest annual audited financial statements, except as noted below. The directors do not anticipate that any new standards, applicable to the year ending 31 December 2017, will have an impact on the results of the group.

Taxation

Income tax expense has been recognised based on the best estimate of the weighted average annual effective income tax rate expected for the full financial year.

Deferred tax is recognised in respect of all material temporary differences that have originated but not reversed at the balance sheet date.

   2.          SEGMENTAL REPORTING 

The directors believe that the group has only one segment, that of a franchising business. Currently, these operations principally occur in the UK, with only limited business in other territories. Accordingly no segmental analysis is considered necessary.

M WINKWORTH PLC

NOTES TO THE CONSOLIDATED INTERIM RESULTS

for the period 1 January 2017 to 30 June 2017

   3.          EARNINGS PER SHARE 

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

 
                                                        Weighted 
                                                         average    Per-share 
                                             Earnings    number      amount 
                                             GBP000's   of shares     pence 
 
 Period ended 30.06.17 
            Basic EPS 
            Earnings/number of shares             441      12,733        3.46 
            Effect of dilutive securities           -         659           - 
                                            ---------  ----------  ---------- 
 
            Diluted EPS 
            Adjusted earnings/number 
             of shares                            441      13,392        3.29 
                                            ---------  ----------  ---------- 
 
 Period ended 30.06.16 
            Basic EPS 
            Earnings/number of shares             574      12,682        4.52 
            Effect of dilutive securities           -          41           - 
                                            ---------  ----------  ---------- 
 
            Diluted EPS 
            Adjusted earnings/number 
             of shares                            574      12,723        4.51 
 
 Year ended 31.12.16 
            Basic EPS 
            Earnings/number of shares           1,126      12,733        8.84 
            Effect of dilutive securities           -           -           - 
                                            ---------  ----------  ---------- 
 
            Diluted EPS 
            Adjusted earnings/number 
             of shares                          1,126      12,733        8.84 
                                            ---------  ----------  ---------- 
 

M WINKWORTH PLC

NOTES TO THE CONSOLIDATED INTERIM RESULTS

for the period 1 January 2017 to 30 June 2017

   4.          INTANGIBLE ASSETS 
 
                                       GBP000's 
 Net book value at 1 January 2016           976 
 
 Additions                                   32 
 Amortisation                             (111) 
                                      --------- 
 
 Net book value at 30 June 2016             897 
                                      --------- 
 
 Additions                                   90 
 Disposals                                (164) 
  Amortisation                             (46) 
                                      --------- 
 
 Net book value at 31 December 2016         777 
                                      --------- 
 
 Additions                                   54 
 Amortisation                              (97) 
                                      --------- 
 
 Net book value at 30 June 2017             734 
                                      ========= 
 
   5.          INTERIM RESULTS 

Copies of this notice are available to the public from the registered office at 1 Lumley Street, London, W1K 6TT, and on the Company's website at www.winkworthplc.com

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR UUONRBSAKAAR

(END) Dow Jones Newswires

September 13, 2017 02:00 ET (06:00 GMT)

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