M Winkworth (WINK) H1 2024 earnings summary

Executive summary

• H1 2024 delivered strong results with network revenue up 6% to £27.9m, sales up 9% to £13.4m, and record lettings revenue, reflecting increased market activity and successful franchise expansion.

• Opened three new offices and resold four, with a strong pipeline for further expansion, mainly in London.

• The board evolved with two new non-executive directors and one new executive director, positioning for dynamic growth.

• The business model remains balanced between sales and lettings, providing resilience and recurring revenue.

• Continued investment in digital transformation and talent to drive future growth.

Financial highlights

• Revenue rose 20% year-over-year to £5.14m, with owned offices contributing an additional £380k and franchising up £500k.

• Profit before tax increased 26% to £1.02m, and cash at bank remained strong at £4.12m with no debt.

• Gross margin improved to 83.0% (H1 2023: 82.0%), and basic EPS rose to 5.88p.

• Ordinary dividends of 6.0p per share declared, up 3% year-over-year.

• A one-off large franchise sale fee boosted revenue by £350k.

Outlook and guidance

• Management expects continued growth in transactions due to increased supply, with no significant price increases anticipated.

• Post-election stability and anticipated interest rate declines are expected to boost property market activity.

• The company is on track to meet full-year profit expectations, with Shore Capital forecasting £2.4m PBT.

• Further growth and profitability are expected from majority-owned offices and new franchisees in the pipeline.

• Confident in adding an above-average number of franchisees in 2024 and continued network expansion.