Last checked at 28 Jan 2010 07:00
28 January 2010
M Winkworth plc
Trading Statement
M Winkworth plc ("Winkworth"), the leading franchisor of real estate agencies, is providing the following Trading Statement for the period from November 2009 to date.
Summary
The second half of 2009 saw strong performance led by our offices in prime markets, which witnessed price growth recovery of 20% and certain properties returning to 2007 price levels. This was driven by renewed strength in demand but also reduced supply, particularly in central London, spreading out to London as a whole towards the latter part of the year.
Prime market offices reported that 60-70% of their applicants were international buyers, with significant cash deposits, taking advantage of the weakness of Sterling.
The shortage of available properties worsened towards the end of the year, ensuring a competitive environment amongst buyers and above normal levels of activity over the Christmas period.
We expect our revenue targets for 2009 to have been exceeded and remain very comfortable of the overall result for the year.
Outlook
After the rapid rebound of property in the second half of 2009 and a good start to 2010, despite the extreme weather, it is clear that there is significant momentum in the market and demand for increased finance availability.
The key determinants questions for 2010 will be:
the election and how it affects sentiment
the outlook for interest rates rise
the availability of finance, which continues to cheapen and increase
Although the economic outlook remains uncertain, we anticipate reasonable growth in transactions in 2010 and price rises in the first half being followed by stability in the second as demand and supply balances out.
We continue to see weakness in the industry and comparative value in franchising as a model. Without a return to the volumes of pre-2007, we believe that a number of agencies with high fixed costs and significant structural issues will require a further increase in transactions to make their businesses sustainable, particularly outside of London where we are looking to grow.
Low volumes will continue to lead to consolidation, presenting opportunities to acquire franchised estate agencies on both a small and large scale. Through the efficiencies of the franchise model and without any debt, we are well positioned to take advantage of opportunities within the sector.
Having achieved our target of 8 new office openings in 2009, we are confident we will attain our base organic growth target for 2010 of a further 8 offices, with four new offices set to open in the first quarter of 2010.
For further information please contact:
M Winkworth Plc Tel: 020 8576 5599
Dominic Agace (Chief Executive Officer)
Chris Neoh (Chief Financial Officer)
Milbourne (Public Relations) Tel: 020 7920 2367
Tim Draper
FinnCap Tel: 020 7600 1658
Matthew Robinson/Rose Herbert (Corporate Finance)
Tom Jenkins (Corporate Broking)
About Winkworth
Winkworth is a leading franchisor of residential real estate agencies and is listed on the London Stock Exchange.
Established in Mayfair in 1835, Winkworth has a pre-eminent position in the mid to upper segments of the central London residential sales and lettings markets. In total, the company operates from over 80 offices in the UK, France and Portugal, having doubled in size in recent years.
The franchise model allows entrepreneurial real estate professionals to provide the highest standards of service under the banner of a well-respected brand name and to benefit from the support and promotion that Winkworth offers. Franchisees deliver in-depth local knowledge and a highly personalised service to their clients.
For further information please visit: www.winkworthplc.com