M Winkworth PLC on Wednesday warned that pretax profit in the first half of the year was below a year before and full-year 2023 pretax profit is likely to be below market expectations as a result.

The franchisor of residential real estate agencies in London booked pretax profit of £2.5 million in 2022. In the first half of last year, it was £1.1 million.

Winkworth explained that, while the first quarter of 2023 was in line with management expectations, the sales market ‘proved to be more challenging’ in the second quarter, as UK mortgage rates continued to rise. More positively, the lettings market strengthened.

Preliminary figures for gross network income in the first half show a fall of 6% compared to a year before, the company said. This is due to a 20% fall in sales revenue, partially offset by a 11% rise in lettings revenue.

‘Property prices have held up reasonably well, but transactions have slowed, leading to a high number of agreed sales being delayed to the second half of the year,’ Winkworth said.

The company remains debt free, with cash held in line with its level in June 2022. Winkworth declared a 2.9 pence per share dividend for the second quarter, the same as for the first quarter. It paid out 11.0p in total for 2022.

Winkworth shares were down 3.3% at 140.25p in London at midday on Wednesday.

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