TIDMWINK
RNS Number : 7510U
M Winkworth Plc
08 April 2021
M Winkworth Plc
Audited final results for the year to 31 December 2020
M Winkworth plc ("Winkworth" or the "Company"), the leading
franchisor of real estate agencies, is pleased to announce its
results for the year ended 31 December 2020.
Highlights for the year
-- Franchised office network revenue of GBP47.7 million (2019: GBP48.3 million)
-- Revenues of GBP6.41 million (2019: GBP6.42 million)
-- Profit before taxation GBP1.53 million (2019: GBP1.63 million)
-- Year-end cash balance of GBP4.66 million (2019: GBP3.57 million)
-- Rental income 50% of total revenues (2019: 51%)
-- Two new franchises opened
-- Dividends of 6.68p declared (2019: 7.8p)
Dominic Agace, CEO of the Company, commented: "Our business
model was tested by extreme conditions in 2020 and proven to be
very robust. The benefits of local expertise, highly motivated
managers and a state-of-the-art digital platform meant that we were
quick to emerge from lockdown and improve our market share. While
challenges remain, we expect to see an increase in activity in 2021
and we are well positioned to further grow our network and respond
to the evolving needs of our customers."
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
Shore Capital Ltd (NOMAD and Broker) Tel : 020 7408 4090
Robert Finlay
David Coaten
Henry Willcocks
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 is admitted to trading on the AIM Market of the London
Stock Exchange.
For further information please visit: www.winkworthplc.com
Chairman's Statement
We have delivered a positive set of results for 2020, especially
in view of the shutdown of sales in the second quarter of the year.
Management and lettings activity held up well and was carefully
managed throughout the lockdown. Clearly, the close relationship
between the local office teams and their clients and tenants has
been an important factor and maintaining the revenue from this
business line reflects well on our systems and training.
During both the first and second lockdowns, the benefit of our
outlets being in key locations was once again proven. Our local
experience meant that we were able to perform valuations remotely
and it was noticeable that, on the lifting of lockdown, our clients
were delighted to meet us in a controlled environment. We believe
that this relationship helped to power our recovery, which confirms
our confidence in Winkworth's high street presence. It is not our
intention to develop remote working - this pandemic has
demonstrated that our business is reliant on teamwork and good
communications.
In recent months we have seen some reduction in interest in
lettings and, in particular, there has been lower demand in central
London, especially in the foreign student market. As families
re-plan their lives, however, the market has swung back towards
sales. This has been driven by buyers seeking extra room for
workspace and gardens, while still maintaining access to central
London. Our country offices have experienced an influx of new
buyers, while in the suburbs we have been inundated with buyers
seeking additional or outside space. We expect this trend to
continue.
We acted with caution during the first lockdown but progressed
with the projects in hand such as the improvements to our knowledge
and regulation hub, which we use to deliver our support services
and training to our franchisees, and further upgrades to our
website. We will be adding new franchises in 2021 and will continue
to use the Company's substantial resources to attract and back
entrepreneurial estate agents in key growth areas of Southern
England, acting opportunistically as opportunities arise.
Winkworth ended the year with no debt and a healthy cash balance
of GBP4.66m after paying dividends for 2020 of 6.68p per share. The
reduction in quarterly payments on the previous year reflected
restraint in the face of the unpredictable fluctuations in trading
due to lockdowns. Our offices have now been open since mid-May of
last year and, after a rebound in sales activity in the second
half, we have experienced strong momentum going into the first
quarter of this year. Having repaid the furlough money received
from the government for franchisor staff, the board remains
committed to paying a quarterly dividend and restoring its
progressive dividend policy.
Simon Agace
Non-Executive Chairman
7 April 2021
CEO's Statement
After the dramatic shutdown of the property market in March last
year, following the first lockdown when all non-essential sales
were suspended, the property market bounced back strongly once
trading resumed.
The pandemic brought a new set of buyers to the market, driven
by a desire to change their living conditions after several months
of working from home. It effectively brought forward moves that may
well have been up to five years away, as people pushed for more
space in suburban London or moved to the country.
This new influence, boosted by a stamp duty holiday, led to a
surge in sales in the second half of the year, creating a logjam in
conveyancing and extending transaction times considerably as the
system struggled to cope with demand. All our markets benefitted
from this with the exception of central London, where a lack of
international travel and the repatriation of much of the
international community limited demand in sales.
We further improved our strong position in the marketplace and
ranked 2(nd) in London with a market share of 4.53%, having
increased our share of SSTC properties in 2020 by 0.35%(1). From a
national perspective the results were also good as we saw our
market share of SSTC properties increasing, climbing by another
place in the UK rankings to 11(th) in 2020.
The rentals and management side of the business was little
affected in the first half of the year, with lettings income
proving resilient as many tenants stayed put and renewals business
increased. Over the course of the second half of the year our
London rentals saw some weakness, but country rentals progressed
well. Once again, our management fees continued to grow as
landlords chose our management service to guide them through a
rapidly changing regulatory environment, growing by 6% and
accounting for 21% of group revenue (2019: 20%).
In central London, the pandemic had a more immediate impact on
rentals demand due not only to a lack of international travel, but
also to students and young professionals returning to family homes
in the country. Whereas our outer London rentals revenues were
broadly unchanged on 2019, central London rents declined by up to
20% in certain areas in 2020 and our overall London revenues fell
by 4%. Our country rental income, however, grew by 12%.
In 2020, gross revenues of the franchised network of GBP47.7m
were broadly flat year-on-year (2019: GBP48.3m). Sales income was
unchanged at GBP23.8m (2019: GBP23.8m) while Lettings and
Management fell by 2% to GBP23.9m (2019: GBP24.4m), producing an
equal revenue split between these two activities compared to a
ratio of 45% Sales and 55% Lettings and Management at the end of
H1.
Winkworth's revenues were flat at GBP6.41m (2019: GBP6.42m) and
profit before taxation was 6% lower at GBP1.53m (2019: GBP1.63m).
The Group's cash position at year end increased to GBP4.66m (2019:
GBP3.57m). Dividends of 6.68p were declared for the year (2019:
7.8p).
Despite the challenging market conditions, we were able to open
two new franchises in Long Melford and Bagshot, with a new office
in Hellesdon falling into 2021. We have several further offices
scheduled to open in 2021 and maintain our target of opening five
new offices per year.
Tooting, in which we made an investment in 2019, continued to
show promising growth, with revenues up by 17%. Having started the
year ranking second in the area by market share of sales agreed, it
ended it ranking consistently as the leading agent. Tooting is now
the 13th largest office in the Winkworth network by gross
revenue.
As we pursue the strategy of backing talented operators, and
where appropriate taking an equity position to deliver more than
the 8% franchise return, in 2020 we took a second step by investing
in the Crystal Palace office. Having mapped target markets and
identified individuals who we believe can make a significant
contribution to our business, we have further developments in the
pipeline. We will incentivize these individuals with the prospect
of earning equity in the office or offices that they manage.
Last year saw a resurgence of merger and acquisition activity in
the sector and some consolidation amongst our peers. We believe
that this will provide us with an opportunity to attract new
franchisees and managers looking for an opportunity to strike out
on their own. The strength of our brand, our ongoing investment in
the digital platform, our compliance solutions, and the support
that we provide from our central office are all powerful selling
points for dynamic entrepreneurs.
Outlook
Sparked by the stamp duty holiday on purchases up to GBP500,000,
demand has remained strong throughout the recent lockdown and there
is a considerable backlog of transactions to be cleared. The
government has signaled its intention to continue to support
homeownership, extending the existing stamp duty holiday until June
and on purchases up to GBP250,000 until September, as well as
committing to help first time buyers by providing guarantee support
on 95% mortgages.
With a successful vaccination campaign making great progress,
and as travel and nonessential shops and hospitality open again, we
expect the residential sales market to continue to show healthy
momentum. After several years in the doldrums due to Brexit
uncertainty, and backed by a proactively supportive government, the
prospects look positive, albeit that affordability constraints in
London will limit price growth.
We expect the appeal of owning property in central London to
return. With prices having come off some 15% since 2014, and with
Brexit and its initial uncertainty now behind us, we would expect
central London to regain its safe haven status and attract
significant investment once international travel resumes.
As cities re-open in 2021, we would also expect rentals demand
to recover as young professionals return to city living and the
re-opening of borders brings back international students, reversing
some of the price declines seen in 2020. Supply may be limited by
landlords selling down their portfolios after the difficulties of
the last 12 months and as the stricter legislative requirements to
which they are now required to adhere to discourage marginal
participants. While these elements should help activity and rental
prices to recover, it may take several years for urban rents to
surpass 2019 levels.
Growth in rental prices in the country may slow as demand eases
slightly and the support for 95% LTV mortgages from the government
encourages tenants into the sales market, but we believe that
activity will hold up well, albeit with more measured price growth
of around 3%.
In the first quarter we have seen a strong uptick in sales
agreed and a very encouraging increase in applications for both
sales and rentals. We anticipate an increase in transactions this
year and Winkworth is set to benefit from this, as a more active
market encourages agents to set up and manage their own agency.
Franchising under a top-quality name is the safest and quickest way
to do this. We also see the opportunity to accelerate our growth by
financially supporting talented agents and increasing our market
share in high potential areas, thus enhancing our returns.
(1) Source: TwentyCI
Dominic Agace
Chief Executive Officer
7 April 2021
M WINKWORTH PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 31 DECEMBER 2020
2020 2019
Notes GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue 6,406 6,416
Cost of sales (1,137) (1,320)
--------- ---------
GROSS PROFIT 5,269 5,096
48 -
Administrative expenses (3,921) (3,561)
Negative goodwill 119 68
--------- ---------
OPERATING PROFIT 1,515 1,603
Finance costs (22) (29)
Finance income 39 54
--------- ---------
PROFIT BEFORE TAXATION 1,532 1,628
Tax 4 (295) (320)
--------- ---------
PROFIT AND TOTAL COMPREHENSIVE INCOME FOR
THE YEAR 1,237 1,308
========= =========
Profit and total comprehensive income attributable
to:
Owners of the parent 1,169 1,285
Non-controlling interests 68 23
--------- ---------
1,237 1,308
====== ======
Notes
Earnings per share expressed in pence per 6 2020 2019
share: GBP GBP
Basic 9.18 10.09
Diluted 9.14 10.06
--------- ---------
M WINKWORTH PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 2020
2020 2019
Notes GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Intangible assets 850 668
Property, plant and equipment 827 607
Prepaid assisted acquisitions support 338 541
Investments 71 43
Trade and other receivables 307 372
--------- ---------
2,393 2,231
--------- ---------
CURRENT ASSETS
Trade and other receivables 911 913
Cash and cash equivalents 4,661 3,571
--------- ---------
5,572 4,484
--------- ---------
TOTAL ASSETS 7,965 6,715
========= =========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 64 64
Share based payment reserve 8 51 51
Retained earnings 5,147 4,867
--------- ---------
5,262 4,982
Non-controlling interests 165 97
--------- ---------
TOTAL EQUITY 5,427 5,079
--------- ---------
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 512 294
Deferred tax 90 66
--------- ---------
CURRENT LIABILITIES 602 360
Trade and other payables 1,756 1,085
Corporation tax payable 180 191
--------- ---------
1,936 1,276
TOTAL LIABILITIES 2,538 1,636
--------- ---------
TOTAL EQUITY AND LIABILITIES 7,965 6,715
========= =========
M Winkworth PLC
Consolidated Statement of Changes
in Equity
for the Year Ended 31 December
2020
Called
up
share Retained Share Other Non-controlling Total
capital earnings premium reserves Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2019 64 4,550 - 51 4,665 - 4,665
Changes in equity
Dividends - (968) - - (968) - (968)
Acquired with subsidiary - - - - - 74 74
Profit and total comprehensive
income - 1,285 - - 1,285 23 1,308
------- -------- ------- -------- ------- --------------- -------
Balance at 31 December 2019 64 4,867 - 51 4,982 97 5,079
------- -------- ------- -------- ------- --------------- -------
Changes in equity
Dividends - (889) - - (889) - (889)
Profit and total comprehensive
income - 1,169 - - 1,169 68 1,237
------- -------- ------- -------- ------- --------------- -------
Balance at 31 December 2020 64 5,147 - 51 5,262 165 5,427
======= ======== ======= ======== ======= =============== =======
M WINKWORTH PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2020
2020 2019
Notes GBP'000 GBP'000
Cash flows from operating activities
Profit before tax 1,532 1,628
Depreciation charges 555 573
Reduction in fair value of fixed asset
investments - 10
Impairment of intangible 66 -
Negative goodwill (119) (68)
FV uplift on investment (28) -
Finance costs 22 29
Finance income (39) (54)
1,989 2,118
Increase in trade and other receivables 67 (1,464)
Increase/(decrease) in trade and other
payables 706 1,621
--------- --------------
Cash generated from operations 2,762 2,275
Tax paid (313) (255)
--------- --------------
Net cash from operating activities 2,449 2,020
--------- --------------
Cash flows from investing activities
Purchase of intangible fixed assets (142) (170)
Purchase of tangible fixed assets (82) (9)
Assisted acquisitions support (17) (98)
Cash acquired on acquisition - 116
Cash paid to acquire subsidiary - (23)
Interest received 39 54
--------- --------------
Net cash from investing activities (202) (130)
--------- --------------
Cash flows from financing activities
Principal paid on lease liabilities (246) (257)
Interest paid on lease liabilities (22) (29)
Equity dividends paid (889) (968)
--------- --------------
Net cash from financing activities (1,157) (1,254)
========= ==============
Increase/(decrease) in cash and cash equivalents 1,090 636
Cash and cash equivalents at beginning
of year 3,571 2,935
--------- --------------
Cash and cash equivalents at end of year 4,661 3,571
========= ==============
WINKWORTH PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2020
1. STATUTORY INFORMATION
M Winkworth Plc is a public company, registered in England and
Wales and listed on AIM. The company's registered number and
registered office address can be found on the Company Information
page.
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 International Financial Reporting
Standards adopted by the European Union ("IFRS"). 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.
Although Covid-19 will inevitably continue to have an impact on
the market over the remainder of 2021, the directors have outlined
on page 6 the risks which the group may be faced with, and how they
intend on mitigating these risks. This demonstrates that the group
has sufficient working capital for the foreseeable future.
The group has a strong cash base and no borrowings, with a high
level of discretionary expenditure, which can be cut at short
notice. Income would need to fall substantially for a prolonged
period, beyond six months, before a cash shortfall arose, at which
point stronger measures would be taken to cut costs. 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 and Crystal Palace Estates 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.
2020 2019
GBP'000 GBP'000
Revenue
Corporate owned offices 1,083 498
Management service fees 5,323 5,918
------- -------
6,406 6,416
4. TAXATION
Analysis of tax expense
2020 2019
GBP'000 GBP'000
Current tax:
Taxation 302 311
Adjustment re previous years (3) 6
------- -------
Total current tax 299 317
Deferred tax (4) 3
------- -------
Total tax expense in consolidated statement of profit
or loss and other comprehensive
Income 295 320
======= =======
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:
2020 2019
GBP'000 GBP'000
Profit before income tax 1,532 1,628
------- -------
Profit multiplied by the standard rate of corporation
tax in the UK of 19% (2019 - 19%) 291 309
Effects of:
Expense not deductible for tax purposes 3 10
Adjustment in respect of prior periods (3) 6
Depreciation in excess of capital allowances 5 11
Income not taxable - (13)
Other movements (1) (3)
------- -------
Tax expense 295 320
======= =======
5. DIVIDENDS
2020 2019
GBP'000 GBP'000
Ordinary shares of 0.5p each 889 968
======= =======
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.
2020
Earnings Weighted Per-share
average amount
number of
shares
GBP'000 '000 pence
Basic EPS
Earnings attributable to ordinary shareholders 1,169 12,733 9.18
Effect of dilutive securities - 57 -
--------- ----------- ----------
Diluted EPS
Diluted earnings 1,169 12,790 9.14
========= =========== ==========
2019
Earnings Weighted Per-share
average amount
number of
shares
GBP'000 '000 pence
Basic EPS
Earnings attributable to ordinary
shareholders 1,285 12,733 10.09
Effect of dilutive securities - 37 -
--------- ----------- ----------
Diluted EPS
Diluted earnings 1,285 12,770 10.06
========= =========== ==========
7. CALLED UP SHARE CAPITAL
2020 2019
Authorised: GBP'000 GBP'000
20,000,000 Ordinary shares of 0.5p 100 100
========= ===========
2020 2019
Issued and f GBP GBP
u lly paid:
12,733,238 Ordinary shares of 0.5p 64 64
========= ===========
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 13 January 2021, M Winkworth Plc declared dividends of 1.8p
per share for the fourth quarter of 2020.
On 23 March 2021, the Heads of Terms were signed in relation to
Winkworth Franchising Limited's acquisition of a further 35% of
Tooting Estates Limited, which operates the Winkworth franchise in
the Tooting area, for GBP136,963.
10. FINANCIAL INFORMATION
The financial information contained within this announcement for
the year ended 31 December 2020 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 2019 have been filed with the Registrar of
Companies and those for the year ended 31 December 2020 will be
filed following the Company's annual general meeting. The auditors'
reports on the statutory accounts for the years ended 31 December
2020 and 31 December 2019 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 2020 together with the notice of the Annual General
Meeting to be held at the offices of M Winkworth Plc on 11 May
2021, will be posted to shareholders shortly and will be available
to view and download from the Company's website at
www.winkworthplc.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR UPUQUCUPGGBM
(END) Dow Jones Newswires
April 08, 2021 02:00 ET (06:00 GMT)
M Winkworth (LSE:WINK)
Graphique Historique de l'Action
De Jan 2025 à Fév 2025
M Winkworth (LSE:WINK)
Graphique Historique de l'Action
De Fév 2024 à Fév 2025
