Winkworth Franchising has reported a “difficult” year after publishing its 2016 annual results.

This includes franchisee turnover down 6% to £46.1 million and franchisor profits before taxation down 25.6% at £1.42 million.

But lettings saved the company from worse results. The annual report says its franchisee network, which is concentrated in prime markets within London, the South East, East of England and Midlands, experienced a significant increase in rental income from 38% of total revenues in 2015 to 44% last year.

“Our rentals business continued to grow on the back of new initiatives such as the corporate relocation department,” says Dominic Agace, CEO of Winkworth Franchising (pictured).

“With an improved proposition for landlords, property management commissions grew by 16% to represent 15% of rental revenue compared to 12% in 2015.

“Rental income growth in the country was stronger still, rising by 21%, so that the total contribution to group turnover from offices outside of London increased from 19% in 2015 to 21%. This vindicates our strategy of expansion outside of London since 2008.”

But Winkworth Franchising experienced a quiet year for sales, created it says mainly by worries over Brexitg, although like many other agents it experienced a rush of landlords buying properties last year to beat the Stamp Duty deadline.

Country sales

In contrast to this, its country sales franchisees performed strongly, recording an increase of 3%, and now represent 27% of Winkworth Franchising’s total sales revenues.

Agace also reveals that business was most brisk in suburban areas and provincial towns, where the recently-introduced higher Stamp Duty for property over £1m “was less of an impediment”, he says.

The company opened two new branches, in Colindale and Malborough increasing its total to 94 across the UK. Four existing offices were sold by franchisees to new management. Agace says he expects up to eight new offices to open this year.