Winkworth profit falls by a quarter, eyes upturn

Residential estate agent M Winkworth revealed a 25 per cent slump in half year pre-tax profit, after exceptional costs subdued market conditions, but it anticipates transactions in the UK will rise by 10 per cent in 2012 following an upturn in the final quarter.

The group, which has been selling property since 1835, said pre-tax profit fell to £421,140 for the six months ended June 30th 2012 from £564,846 for the same period in 2011 after £90,000 of exceptional costs.

Winkworth, which has opened five new offices in 2012 and has signed up for a further two in 2013, said exceptional costs related to the company's brand modernisation as well as a relatively weak international performance.

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Sales for the period were up 5.8% to £1.89m while cash generated from operations soared to £241,387 from £35,585 the year before. Earnings per share fell to 2.56p from 3.28p a year before.

Commenting on market conditions, Chief Executive Officer Dominic Agace said: "With the festivities surrounding the London Olympics now over and the most recent government initiatives to lower the cost of mortgages in place, we expect the year to end well. In a still subdued market we anticipate that overall transactions in the UK will rise by 10% in 2012 following an upturn in the final quarter."

"In the near term, we see our growth coming from our increasing number of country offices, where in 2012 to-date we have added 26% to the average property price listed and, as a result of these being plugged into the Winkworth network, increased average fees by 13%," he added.

The group said it is still on track for substantial growth between 2012 and 2015, but expects much of the growth to come from outside of London as it builds on its existing presence in the country and as its earlier expansion efforts mature.

An interim 2012 dividend of 2.4p has been declared.

Shares of Winkworth climbed 1.95p or 2.14% to 92.95p in late afternoon trading and have surged 12.35% in the last week.

CJ