In the six months to July, sales improved 9.4% to £2 million compared to a year ago, producing a pre-tax profit reaching £600,000, up from £421,140.
The cash generated from its operations almost doubled to £464,296, which led management to declare a 2.6p interim dividend, up from 2.4% at the same stage in 2012.
More growth is expected. The value of properties in London jumped almost 10% in the past year while mortgage approvals reached a five-year peak in August. Management anticipate transitions in the market will improved by 12% this year as the cost of buying has fallen.
There's been record sales in July and August which leads house broker Liberum Capital to upgrade its 2013 earnings before interest and tax (EBIT) and earnings per share (EPS) estimates by 4% and 6%, respectively.
The interims have provided a boost for the stock, which has seen its shares retrench 27% since the end August.
The company, which can trace its roots back to 1835, has a strong position in central London, which accounted for 84% of its sales in the first half. Five of its offices in the capital accounted for 22% of the company’s sales.
Growth could come from additional capacity. Winkworth’s continued to expand its network during the period by opening six branches, bringing its estate to 90 across the UK and Portugal. Management also signed a franchising agreement in India in the first half. This has yet to be factored into Liberum’s forecasts.
Management’s optimism comes from not only a recovery in the capital, but also in other areas such as the South West and the Midlands.
Another company benefiting from the start of a new cycle in the property market is Foxtons (FOXT), which started trading unconditionally on the main market of the London Stock Exchange this morning. The £785 million cap raised £55 million to clear its debts from last week’s initial public offering (IPO) (20 Sept).