The Group remains positive about the long-term despite tough market conditions.
Companies: M Winkworth plc
M Winkworth (LON: WINK) has released its Half-year report for the first six months of 2017 which epitomise the tough conditions the established High Street estate agents are currently facing.
Highlights of the report include Revenues down 7.6% to £2.54m (H1 16 £2.75m) and PBT down 25.2% to £0.54m (H1 16 £0.72m), while Cash generated from operations was £0.77m (H1 16 £0.44m).
A dividend of 3.6p will be issued to shareholders, marginally up from the 3.5p dividend issued off the back of H1 16's results.
Seven new Winkworth franchises were also signed during the period.
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."
They acknowledged that "markets remain slow" and "an uncertain outlook for sales volumes continues to weigh on the market" but are confident FY17 numbers will be in line with expectations.
Shares jumped slightly with the results, trading up around 3% this morning.
Winkworth, along with other sales and letting agents continue to feel the pressure from the economic uncertainties surrounding Brexit, bolstered by the recent rise in Stamp Duty and continued pressure from market newcomers such as Purplebricks.
WINK shares have fallen significantly in the past few years as a result of the Group's flat growth over the past 4-5 years, with the current share price of 103p trading at a PE ratio of 11x versus the industry median of 14x.
Winkworth's market cap is currently around £12m with flat revenues of c. £5-6m in the last three years - compare this to Purplebricks' market cap of £1bn with Revenues of £3m, £18m and £47m in 2015, 2016 and 2017 respectively.