Winkworth warned that a sharper-than-expected slowdown in housing market activity in the second half of 2025 hit profits despite resilient revenue growth across its franchise network.
The London-focused estate agency franchisor said network revenues rose by about 6% in the year to 31 December, with sales revenues up 9% and lettings revenues 2% higher.
However, weaker trading in the second half meant revenues for H2 were broadly flat year-on-year as transactions were delayed ahead of the Autumn Budget.
As a result, adjusted pre-tax profits for the full year are expected to come in at around £2.1m, down from £2.35m in 2024 and about 20% below current market expectations. Net cash at the year end is expected to be at least £3.9m, compared with £4.1m a year earlier.
ONE-OFF COSTS
The company said the profit decline also reflected one-off administrative costs and a planned increase in marketing spend in prime central London. These costs, largely flagged at the half-year stage when pre-tax profits fell 19%, are not expected to recur.
Winkworth said the slowdown late in the year did not reflect a structural shift in its markets. While activity dipped ahead of the Budget, the measures announced did not materially alter supply and demand dynamics.
The board said early enquiry levels in January 2026 had been strong and expects deferred transactions to progress as confidence improves and mortgage rates ease.
MANAGEMENT CHANGES
The group continued to reshape its franchise portfolio during the year. Offices in which Winkworth held equity stakes underperformed budget expectations, prompting management changes.
At its Crystal Palace office, turnover rose sharply following Winkworth’s takeover in 2020, but profitability lagged expectations. The company sold its stake in December to a neighbouring franchisee, with the office now trading successfully and forecast to support revenues in 2026.
Elsewhere, Winkworth opened four new offices during the year and resold seven to new franchisees. It also continued to provide loans to selected operators to support future growth and market share gains, entering 2026 with what it described as a healthy pipeline.
DIVIDEND RAISE
Despite the profit dip, the board raised dividends. Winkworth will pay a final quarterly dividend of 3.3p per share, unchanged year-on-year, taking total ordinary dividends for 2025 to 13.2p, up 7.3% from 12.3p in 2024.
Dominic Agace (main picture, inset), Chief Executive, says: “Despite a temporary slowdown in activity towards the end of the year, Winkworth has continued to invest in its franchise network and has increased dividends to shareholders.
“Early enquiry levels in 2026 have been encouraging, and with the outlook for mortgage rates improving, we believe the business is well positioned for the year ahead.”
