Profit dips, dividend rises: unpacking Winkworth’s 2025 results
M Winkworth Plc – the London-centric estate agency franchisor on AIM – has posted steady top-line numbers but softer profits for 2025. Revenue was flat at £10.74 million, while profit before tax slipped 11% to £2.11 million. Despite that, the Board lifted the full-year dividend by 7% to 13.2p per share. Cash closed the year at £3.90 million with no debt.
Management is frank about a year of two halves. Sales surged in H1 on a rush to beat stamp duty changes, then cooled in H2 amid Autumn Budget jitters and a slower-than-hoped mortgage repricing. Lettings held up, with a notable tilt towards higher-quality, stickier property management income.
Key numbers investors should know
| Group revenue | £10.74 million (2024: £10.79 million) |
| Operating profit | £1.997 million (2024: £2.286 million) |
| Profit before tax | £2.11 million, down 11% (2024: £2.36 million) |
| Basic EPS | 12.65p (2024: 13.73p) |
| Year-end cash | £3.90 million (2024: £4.09 million) – no debt |
| Dividend | 13.2p per share, up 7% (2024: 12.3p) |
| Network revenue (franchise offices) | £68.7 million, up 6% (2024: £64.7 million) |
| – Sales revenue | £35.8 million, up 10% |
| – Lettings revenue | £32.9 million, up 3% |
| Sales share of network revenue | 52% (2024: 51%) |
| New offices opened | 4 (2024: 3) |
| Franchise resales | 7 |
| Profit on disposal of subsidiary | £0.305 million |
| Cash from operating activities | £2.17 million (2024: £1.69 million) |
| Franchisee loans deployed | £1.32 million (at year-end) |
Sales-fuelled first half, hesitant second half
Q1 2025 was “exuberant” as buyers rushed to complete ahead of changes to the first-time buyer stamp duty exemption in April. That pushed sales and royalties higher in H1. But the mood turned in H2 as talk of new tax measures ahead of the Autumn Budget, and mortgage rate relief taking longer to feed through, encouraged a wait-and-see approach.
Across the full year, network sales revenue rose 10% to £35.8 million. Outer London and the country performed strongly (both up 12% by revenue contribution), while more sentiment-driven prime Central London saw a 1% decline and low transaction volumes. Luxury stock remained under pressure as buyers reined in budgets.
Lettings mix shift: property management outgrows let-only
Network lettings and property management revenue edged up 3% to £32.9 million. Within that, lettings fees declined 5% to £15.6 million, while property management income grew 9% to £17.0 million. For the first time, management fees represented a larger slice of network income than lettings – 24.8% versus 22.7%.
That matters. Management mandates are recurring, “stickier” revenues with deeper client relationships. Winkworth links the growth to landlords leaning on professional support ahead of the Renters Rights Bill and a busier regulatory backdrop for private rentals.
Franchise engine keeps turning; owned-office clean-up
The model kept expanding: four new offices opened and seven franchises were resold to new operators in 2025, signalling healthy succession and fresh capital at the franchisee level. Already in 2026, four more offices have been added via their largest assisted acquisition to date, building out a new hub around Leamington Spa.
Winkworth exited its underperforming equity-owned Crystal Palace office in December, selling to an existing franchisee. The accounts show a £0.305 million profit on disposal, and management says the unit has “since shown considerable improvement”, with strong forecast revenues to benefit FY 2026. The two remaining equity-owned offices have started 2026 “significantly ahead” of last year.
On operations, the Group has been modernising its core infrastructure: cloud accounting, process digitalisation, web platform enhancements and AI-driven capabilities. Some costs were capitalised; others hit admin expenses in 2025 alongside a planned central London marketing push and premises move. Working capital discipline helped lift operating cash flow to £2.17 million.
Balance sheet: conservative and ready to pounce
Cash ended the year at £3.90 million, there is no debt, and £1.32 million is deployed in franchisee loans. Management describes the capital position as self-funded and sufficient to support dividends, network growth and potential consolidation without external finance. For a franchisor in a choppy market, that is a good place to be.
2026 outlook: resilience with caveats
Early 2026 trading has been “resilient”, with buyer registrations and agreed sales broadly in line with recent years. The Bank of England’s rate cuts to 3.75% initially helped mortgage affordability, but the Middle East conflict has seen swap rates rise, lenders lift fixed rates and pull products. The prospect of further rate cuts has “receded for now”.
Management still expects modest house price growth in 2026 as real incomes recover, but flags materially higher uncertainty on mortgage costs and inflation than at the start of the year. London saw just 73,000 transactions in 2025 – even fewer than during the 2008 crisis – so there is clear upside if sentiment turns.
On rentals, growth is already cooling from recent peaks, which will help tenants. However, the structural undersupply suggests rents remain under pressure in the mid-term.
My take: steady execution, sensible investment, near-term ceiling set by rates
There is a familiar pattern here: the franchise network performed well – up 6% – but central investment, a slow H2 and one-off costs squeezed Group profit. For shareholders, the key positives are the 7% dividend increase, robust cash, no debt, and evidence of franchise growth and resales despite a thin transaction market.
The watch-outs are macro: mortgage rates, geopolitics and low London volumes. If swap rates settle and international demand in prime London stabilises, Winkworth’s sales mix can re-accelerate. In the meantime, the growing property management base provides ballast.
Why this matters for investors
- Income appeal: Full-year dividends of 13.2p signal confidence and a continued commitment to cash returns.
- Defensive mix: A bigger slice of recurring property management income should smooth earnings through cycles.
- Option on recovery: With London transactions at depressed levels, a turn in sentiment could unlock significant upside for sales.
- Prudent balance sheet: £3.90 million cash, no debt and self-funded growth give flexibility if consolidation opportunities emerge.
- Execution risk: Admin costs rose with investment and one-offs – delivery of efficiency gains in 2026 will be important.
Dates, dividends and how to engage
- Declared dividends: 3.3p for Q4 2025 (14 January 2026) and 3.3p for Q1 2026 (8 April 2026).
- AGM: 21 May 2026 at 10.30 am, The Lansdowne Club, 9 Fitzmaurice Place, London W1J 5JD. Notice available at www.winkworthplc.com.
- Investor presentation: 15 April 2026 at 1.00 pm via Investor Meet Company – register at this link.
- Electronic communications: Shareholders can opt in or continue with hard copies – details in the letter and on the Company’s website.
What I’ll be watching next
- Transaction momentum into H2 2026 – do registrations convert as mortgage products settle.
- Prime Central London volumes – any sign of international buyer return.
- Property management growth – retention and upsell as regulations evolve.
- Delivery of efficiency gains from cloud accounting and AI integration – look for operating margin support.
- Further franchise openings and resales – pace of network expansion and assisted acquisitions.
Bottom line: A sensible, cash-generative franchisor doing the right things in a tricky market. The dividend increase is a statement of confidence, and if rates and sentiment play ball, Winkworth is well placed to benefit from any rebound in transactions while enjoying the stability of its growing management income.
