Estate agent franchise M Winkworth (LON:WINK) saw revenues fall 5 percent over the course of 2016, after a strong first half was offset by Brexit uncertainty from June onwards.
Revenues fell to £5.57 million, down from the £5.87 million, with profit before taxation taking a 25.7 percent to £1.42 million. Despite a significant decrease in net cash flow, cash balance at 31st December remained strong at £2.97 million.
The group’s income from rental properties increased, hitting 44 percent of total revenues. Winkworth opened six new franchisees over the year, with two new offices opened and four resold to new management.
Dominic Agace, Winkworth’s CEO, said the market had been “difficult” over the past year, but that an “increasingly balanced exposure between sales and rentals has proved to be a considerable benefit”.
“The early part of the year saw a boom in activity in the run up to stamp duty changes on second home properties, but this was followed by a lull surrounding uncertainty over Brexit and its likely implications. As a result, we experienced an unusually strong first half and a weaker second one.
“I remain confident that Winkworth will not only grow but also increase its market share as it evolves its offering to meet the highest standards of today’s marketplace:, Agace concluded.
Looking forward, Winkworth believe that low unemployment, wage inflation and record low interest rates will continue to underpin the domestic property market. In the rentals market they expect that over-supply from the buy-to-let boom will increasingly be absorbed and that demand from corporate tenants will stabilise; however, the group believe a “broadly flat market” will be favourable to the franchising model and provide new opportunities to grow the business.
Shares in Winkworth rose in early morning trading as investors began to capitalise on the group’s positive outlook. The company are currently trading up 2.49 percent at 103.00 (0825GMT).