M Winkworth

04 November 2022
By Maynard Paton

Results summary for M Winkworth (WINK):

• An acceptable H1 performance that would always struggle against the comparable (and exceptional) H1 but encouragingly matched the preceding H2.

• The subsequent Q3 update provided reassuring ‘mini-budget’ commentary, reiterated an earlier £2.1m profit forecast and announced a further 23% quarterly dividend lift.

• Claims of a leading SSTC market share may contradict statistics from Foxtons, with fresh leadership at the London rival set to create stiffer competition. 

• A robust 25% margin plus £4m net cash left the accounts in good order, although cash conversion was impacted by rising intangible expenditure and more franchisee loans.

• The gloomy outlook for the economy and housing market looks responsible for the possible 10-13x P/E and yield that approaches 7%. I continue to hold.

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08 July 2022
By Maynard Paton

Results summary for M Winkworth (WINK):

• “Extraordinary levels of activity” due to pandemic stamp-duty reductions ensured an outstanding FY 2021 with underlying profit up 167%.

• Talk of sales income again exceeding lettings income plus lifting the Q1 2022 dividend by 23% underpinned a promising FY 2022.  

• Earnings at the company-owned Tooting office may have slumped during the year, although the effective return on the branch’s valuation remains impressive.  

• A super 34% margin, net cash at more than 20% of the share price and trade receivables at just 7% of revenue leave the accounts in good order.

• A possible 9-12x P/E and 6% yield match WINK’s past rating as investors presumably worry about potential problems within the housing market. I continue to hold.

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13 January 2022
By Maynard Paton

Results summary for M Winkworth (WINK):

• An “extraordinarily active” sales market led to an exceptional six-month performance, with the H1 £2m profit exceeding WINK’s peak annual profit from FY 2014.

• Subsequent trading updates then lifted FY 2021 expectations and announced a record quarterly dividend alongside the third special payout of the year.

• Market-share gains versus London rival Foxtons plus very encouraging progress at the company-owned Tooting office underpin the prospect of a “busy” FY 2022. 

• The accounts remain in good order, with this H1 showing a super 38% margin and net cash and investments supporting close to 20% of the share price.

• Near-term earnings may well subside if housing activity cools, but WINK’s reliable dividends may limit the downside with a possible 5% income. I continue to hold.

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30 April 2021
By Maynard Paton

Results summary for M Winkworth (WINK):

• A revitalised property market led to a much stronger H2, with management optimism underlined by a record dividend for Q1 2021.

• Impressive market-share gains continue to be won from London rival Foxtons.

• Early contributions from in-house branches are encouraging, with implied returns on investment of 38%.

• The accounts remain in good order with net cash, respectable margins, positive cash flow and satisfactory returns on equity.

• A possible P/E of 11-14 and a potential 5% income may offer upside should buoyant trading convert into much higher earnings. I continue to hold.

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11 September 2020
By Maynard Paton

Results summary for M Winkworth (WINK):

• A very acceptable lockdown performance, with underlying half-year revenue down 17% and profit down 20%.

• Temporary stamp-duty changes have supported a “significant uplift in activity” and ought to herald a much stronger second half.

• Extremely impressive market-share gains continue to be won from London rival Foxtons.

• Despite a number of accounting re-jigs, the books remain in good shape with respectable margins and net cash.

• A possible P/E of 11-14 and potential income of at least 4% may offer upside should earnings one day regain their momentum. I continue to hold.

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31 May 2020
By Maynard Paton

Results summary for M Winkworth (WINK):

• Acceptable full-year figures that showed revenue up 8% and profit up 12% following an encouraging second half.

• The declaration of a Q1 dividend for 2020 implies possible resilience to Covid-19 and hints at a better-than-expected pandemic performance.

• Very impressive market-share gains continue to be won from London rival Foxtons.

• Despite a number of accounting niggles, the books remain in pretty good shape with high margins and net cash.

• A possible P/E of 8-12 and a potential income of 6% may offer upside should earnings revive and then one day thrive following Brexit, stamp-duty changes and Covid-19. I continue to hold.

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23 September 2019
By Maynard Paton

Results summary for M Winkworth (WINK):

• A standstill London property market left first-half revenue down 3% and profit unchanged. 

• Subdued trading conditions have persisted since the Brexit vote and are likely to continue until the “political and economic uncertainty” clears. 

• Further market-share gains have been won from London rival Foxtons, while the online competition continues to struggle.

• The accounts remain simple, high-margin and cash-flush.

• A possible P/E of 10 and yield of 6.6% do not appear expensive should earnings ever resume their momentum. I continue to hold.

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18 April 2019
By Maynard Paton

Results verdict on M Winkworth (WINK):

• Collecting a greater proportion of franchisee estate-agent income supported an acceptable rate of growth.

• Subdued sector conditions likely to persist until “relative [political] stability” emerges. 

• Further market-share gains won from London rival Foxtons, while threat of online competition continues to subside.

• Accounts still exhibit high margins, a cash-flush balance sheet and appealing returns on equity.

• P/E of 11 and yield of 6% do not appear expensive should earnings resume their momentum. I continue to hold.

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13 September 2018
By Maynard Paton

Update on M Winkworth (WINK).

Event: Interim results for the six months to 30 June 2018 published 12 September 2018.

Summary: These results were quite satisfactory and actually revealed record first-half revenue — despite the estate-agency group remaining dependent on London’s difficult property market. In fact, the confident management narrative said sales commission rates had increased and also described online rivals as “digital experiments”. Meanwhile, the accounts seem in decent shape, the outlook appears relatively encouraging and the valuation is hardly extended. I continue to hold.

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29 March 2018
By Maynard Paton

Update on M Winkworth (WINK).

Event: Final results for the twelve months to 31 December 2017 published 28 March 2018

Summary: The London estate-agency group was never going to issue stunning figures. Nonetheless, a credible performance was reported and I am impressed the business continues to fare well against sector rival Foxtons. Note, too, that WINK’s average percentage commissions actually increased — so perhaps online competition is not that big a threat after all. Meanwhile, the books remain cash rich, the outlook does not seem too bad while the 10x multiple and 6% yield appear modest. I continue to hold.

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