EYE NEWSFLASH: Major estate agency group warns profits will fall materially below expectations

Winkworth has reported higher lettings income but weaker sales revenue for the first half of 2026, as tougher market conditions weighed on the franchise network.

Network revenue fell 1% to £31.6m in the six months to 30 June. That compares with £32m during the same period last year.

Sales revenue dropped 5% from £16.9m to £16.1m.

However, lettings moved in the opposite direction. Revenue increased 3% to £15.5m, compared with £15.1m in H1 2025.

As a result, sales accounted for 51% of total network revenue, down from 53% a year earlier.

Profit falls as legal costs bite

Revenue at M Winkworth Plc itself fell 10% to £4.7m, from £5.2m last year.

The company attributed much of the decline to the winding down of DCI and the deconsolidation of Crystal Palace.

Pre-tax profit fell 5% to £780,000, compared with £830,000 in H1 2025.

That figure includes £110,000 of exceptional legal costs incurred during the period .

Winkworth said underlying profit before exceptional costs should finish slightly ahead of market expectations.

However, ongoing legal and advisory costs are expected to weigh heavily on the reported result. The company now expects full-year pre-tax profit to be “materially below” market expectations.

Meanwhile, cash generation improved during the first half.

Net cash generated from operating activities increased 39% to £1.33m, up from £960,000.

Winkworth ended June with £3.73m in cash and no bank debt. That compares with £3.86m a year earlier.

Four offices open as three close

The Winkworth network also recorded a net increase of one office during the period.

Four new branches opened in Chipping Campden, Shipston on Stour, Stratford-upon-Avon and Wellesbourne.

Meanwhile, offices in Dartmouth, Milford on Sea and Paddington closed.

Winkworth ended the first half with 104 offices across the UK.

Its majority-owned offices generated £1.16m of revenue. They recorded a £10,000 loss before tax.

That compares with revenue of £1.67m and an £80,000 pre-tax profit during the same period last year.

The company declared ordinary dividends of 6.6p per share during the period, unchanged from H1 2025.

Dominic Agace, chief executive of Winkworth, said: “After a very strong H1 in sales in 2025, our year-on-year performance in H1 2026 against a more challenging background was robust.

“While the path of interest rates in the UK, more than ever a key determinant for the property market, is hard to read, we remain confident of our position and the further outperformance of our franchisees.”