M Winkworth

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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13 September 2017
By Maynard Paton

Quick update on M Winkworth (WINK).

Event: Interim results for the six months to 30 June 2017 published 13 September 2017

Summary: These figures could have been a lot worse, given the estate-agency firm remains dependent mostly on the standstill London property market. The major highlight derived from the statement was that WINK continues to outperform Foxtons, and it appears the group is now using the difficult sector to expand its franchising network. Meanwhile, the financials remain in order, the outlook seems relatively promising and yet the valuation is still in the doldrums. I continue to hold.

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06 April 2017
By Maynard Paton

Quick update on M Winkworth (WINK).

Event: Final results for the twelve months to 31 December 2016 published 30 March 2017

Summary: These were never going to be great figures from the London estate-agency firm. However, at least WINK outperformed larger rival Foxtons while the favourable economics of the group’s franchising model remain quite clear. True, the immediate outlook for WINK is rather mixed and there is online competition to consider, too. However, all that seems priced into the P/E of 8 and 7%-plus income. I continue to hold.

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14 September 2016
By Maynard Paton

Quick update on M Winkworth (WINK).

Event: Interim results for the six months to 30 June 2016 published 13 September 2016

Summary: A quite satisfactory statement that suggested this London-dependent estate agency should be able to cope with the capital’s slower property market. Indeed, the business appears keen to expand and the pace of its new franchisee openings may in fact accelerate. Margins remain high, the balance sheet remains strong and a P/E of 7 seems to price in a lot of bad news. I bought more shares in August and continue to hold.

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23 March 2016
By Maynard Paton

Quick update on M Winkworth (WINK).

Event: Final results for the year to 31 December 2015 published 23 March

Summary: A somewhat better set of figures than I had been anticipating from this estate-agency franchising business. The second-half looks to have been bolstered by extra franchisee fees, which helped WINK register a decent second half and improve its cash flow. Margins and returns on equity remain superb at 31%, the shares do not seem over-priced — but will the Internet crush the income of traditional estate agents? I just don’t know, but continue to hold.

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09 September 2015
By Maynard Paton

Quick update on M Winkworth (WINK).

Event: Interim results published 8 September

Summary: A somewhat lacklustre set of results, blamed on a nervous pre-election housing market and extra costs associated with a corporate-relocation department. While the potential of additional lettings income looks promising, cash generation remains disappointing. I still like the simplicity of this franchising business, but must admit to having doubts about the size of its full potential. I continue to hold.

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