Lettings the only bright spot as agency chain issues profits warning

The directors of Winkworth are warning shareholders of a challenging period thanks to higher and faster-raising interest rates - with only the lettings sector providing any comfort.

In a trading statement issued via the London Stock Exchange, the franchise agency chain says that the first quarter of 2022 was in line with management expectations, but the second quarter suffering “a high number of agreed sales being delayed.”

However, good news from the rental sector: “Demand for lettings continues to be strong and, representing approximately half of group revenues, this activity will make a good contribution to group income in 2023.”

Preliminary gross network income figures for the first half of 2023 indicate an overall fall of six per cent, with lettings revenue approximately 11 per cent higher and sales revenues down by 20 per cent compared with H1 2022. 

As a result, the directors say, the company “expects H1 2023 pre-tax profits to be below last year’s level.” 

The statement says: “While the directors believe that confidence will return once buyers can access a broader choice of mortgage finance, the outlook for sales in the second half of the year remains uncertain and the shortfall in H1 2023 means that full year pre-tax profits are likely to fall below market expectations.”

It adds that the balance sheet remains strong and debt free.