Winkworth issues profit warning amid slowing activity

In trading update for July to November, real estate franchisor M Winkworth cautioned that full-year sales and profits are likely to be slightly below market expectations due to a slower-than-anticipated level of activity over the autumn.

Winkworth had said at the time of its interim statement that trading was expected to pick up from the lows of June and July after the Brexit vote and that transactions in the country and suburban London markets were seen returning to growth in the latter part of the year. At that point, stock levels across the industry were low as sellers waited for greater visibility before marketing their property.

Since then, buyers have returned to the market, but at a slower level than this time last year, with a moderate upturn in sales. Amid ongoing uncertainty, some sellers have withdrawn from the market with the intention of reviewing the situation next year.

At the same time, rental prices have softened as supply increased following the surge in buy-to-let purchases before the stamp duty rise in spring – a dynamic which is not expected to change in the immediate future.

While slower levels of activity mean Winkworth now expects profits and sales for the year to be a touch short of market views, it declared an increased dividend for the third quarter of 1.8p per share.

Chief executive officer Dominic Agace said: “The referendum on Europe and results of the US presidential elections have provided much cause for reflection over the course of this year and it is perhaps no surprise that some homeowners have put moves on hold as a result.

“The fundamentals of the housing market in London and its surrounding areas remain strong, however, and with a business model which adapts well to changes in market activity we remain very confident in the long term outlook for the company."

At 1605 GMT, the shares were up 0.9% to 113.00p.