As an estate agent focused on London, M Winkworth (WINK) has predictably benefited from the current buzz in the housing market. Confirmation of last year's strong performance helped lift the shares by 9 per cent on the day these figures were announced.
The operation is run on a franchise basis: every outlet is independent and pays the listed entity a percentage of revenue in exchange for using the Winkworth brand and other services. Against the backdrop of rising transaction volumes - these were up 15 per cent in England last year - Winkworth's total franchise turnover rose 19 per cent. Of this, revenue generated from property sales jumped 25 per cent, while rental income rose by 8 per cent.
The company, which listed in 2009, has spent the downturn opening outlets in relatively depressed areas outside London. This is now paying off nicely, with revenue from country offices up by nearly a third last year. With very limited overheads, the business model also delivers significant operational gearing: net cash from operating activities more than doubled to £1.85m.
Analysts at broker Liberum are forecasting pre-tax profits for the current year of £1.9m and EPS of 11.5p (from £1.7m and 10p in 2013).
| M WINKWORTH (WINK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 164p | MARKET VALUE: | £20.8m | |
| TOUCH: | 158-170p | 12-MONTH HIGH: | 239p | LOW: 90p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 31p* | NET CASH: | £2.6m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 3.7 | 1.1 | 7.0 | 4.3 |
| 2011 | 4.0 | 1.2 | 7.1 | 4.6 |
| 2012 | 4.3 | 1.1 | 6.0 | 4.9 |
| 2013 | 4.9 | 1.7 | 10.1 | 5.4† |
| % change | +14 | +55 | +68 | +10 |
Ex-div: - Payment: - *Includes intangible assets of £1m, or 8p a share †Final dividend paid on 19 Mar | ||||
