Good afternoon, ladies and gentlemen, and welcome to the M Winkworth PLC half-year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press Send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, as usual, we would just like to submit the following poll, and if you would give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to the executive management team from M Winkworth. Dominic, Andrew, good afternoon.
Good afternoon.
Good afternoon. Hello, everyone. I'm Dominic Agace, Chief Exec. of M Winkworth PLC, and this is Andrew Nicol, CFO of M Winkworth PLC, and it's our pleasure to be here to present H1 2024 results, so on that note, I'll crack on through them, so I thought, first of all, for those that aren't familiar, we'd go through the Winkworth model so that you can get a feel for how it operates. We're a very old business, established in 1835, originally. We started franchising in 1981, which I think was the first. We were the first company to franchise estate agents in the UK. Since then, we've grown from Central London outwards to a hundred UK franchise offices.
We own three ourselves, which are, I should say, in partnership with entrepreneurial managers that I'll explain a bit more about as we go through the presentation. As I said, we're very, we grew from London, and we're predominantly London in terms of 57 of those offices are in London and 46 elsewhere in the U.K. A few things about the model that are sort of important to tell everyone, I suppose. The model works off 8% of gross revenues as the franchise fee. For that, what we try to do is provide a platform to enable an independent estate agency, effectively, to trade under our name and appear in the top three in their local marketplace. We aspire to be in the top three because we believe that's a sustainable position for any estate agency in any market.
That platform that we look to create is effectively to provide the franchisee with the same services as he would have had when working for an employer as part of a network, so effectively, he can come or she can come over to our model, open their own business, and have everyone at the end of the phone that they were used to having. In terms of sort of contractual elements, each franchisee takes their own lease. We take an option on that lease should we need to take over the operation, but the leases are held by the franchisees as are all the employment contracts and local marketing costs.
The other main part to say is all sales are collected through us, so the contracts are in our name, and then they're paid out to the franchisees, deducting our 8%, as we go. So that's a little bit about the model, and then we'll start off to get into the operational overview. I think the highlights so far this year are that sales activity has been increasing. I think we saw the much-awaited end of the tightening cycle towards the end of last year, and some enthusiasm that we're on the right trajectory now this year, and so we saw sales agreed 20% ahead of H1 2023.
We continuing to see that trend as now we've seen interest rates go down, and we expect further cuts ahead. Our owned offices, again, which we'll talk about, where we have been in partnership with entrepreneurial managers, have progressed significantly and revenues growing ahead of expectations. Our franchise resales, where we see an opportunity to invest in new people to bring on board into the Winkworth network to take offices, regenerate offices, and push them forward again, has been going very well, and we've been attracting some high-quality people and looking forward to bringing more of those on board throughout the rest of the year. We have a healthy pipeline of new franchisees coming to us to set up shop under the Winkworth banner.
So on that note, I'll hand you over to Andrew to talk through the numbers.
Thanks very much, Dominic. I suppose the overriding comment is that our business remains strong in the first half. Network revenue was up 6% to GBP 27.9 million, and within that, we had another record half year, first half year for lettings. That was up 4% to GBP 14.5 million. Sales, on the back of what Dominic was saying, grew 9% to GBP 13.4 million. That translated down to a Winkworth revenue of GBP 5.14 million, up 20% on H1 2023. Within that, the owned offices delivered another GBP 380,000 of uplift on the previous year. The franchising business increased revenue by GBP 500,000.
The increase in sales and lettings generated GBP 125,000 of additional income for us, and we had a one-off large franchise sale fee, which meant that that revenue line was up by GBP 350,000 on the previous half year. Cost of sales were up GBP 100,000, again, basically driven by the owned offices, with the growth in Pimlico and revenue growth from the development and commercial business, but as Dominic said, we'll talk about more later. Admin expenses were up just under GBP 600,000, GBP 330,000 relating to the owned offices and about GBP 250,000 to the franchising business. Salaries, a couple of new recruits, and general increase in costs across that.
Meaning that in the half year, we generated a profit before tax of just over GBP 1 million, which was up 26% on the 0.81 million in H1 2023. The cash at bank was remained strong, GBP 4.12 million. We still have no debt, and we declared ordinary dividends of 6p in the first half, up 3% on the last year.
So looking at the business, and its constituent parts, broadly a 50/50 sales and lettings network. Our revenue across the network is broadly 50/50. It was 52% sales this year, as it was slightly stronger, although lettings did grow as well, and it was our record ever lettings half year. You can see the constituent parts and the different sections we cover and how we categorize them. When you look at, starting at sales, you can really see that, out of London outperformed the other areas. In part, you know, this is the sort of demand, most demand-based sector of the market for us. We saw a big rush to the country, and perhaps those prices move up significantly.
That didn't really happen in London, and perhaps because people are moving to the country out of London. So as we've returned to normal, I think you're seeing the fact that there was less price growth, and the fact we returned to more demand-based need to be in London, that outperform other areas, with perhaps the country suffering from the rapid price increases. So just adjusting post the sort of change in culture again. On the letting side, really, you know, we saw extraordinary growth and pressure on that as people moved, there was a great movement of people to the countryside and then back to London. I think what you're seeing is that's caused rents to push, perhaps overshoot in that growth, and they've bounced off affordability ceilings.
and you're seeing that particularly in Central London, where, you know, people can choose to move to other areas where perhaps the rents aren't quite as, quite as high. So, that combined with a certain element of election uncertainty, which always gathers over Central London more than any other area, explains why that was performing slightly weaker than other areas. I would say overall, it has been a slow, first half, despite being a record first half, for lettings, as some of the exuberance for the last few years has come out due to affordability constraints. So as I sort of mentioned, this is our... This gives you the sort of breakdown of by geography really, and by, by sector. So, you know, as I said, we're sort of 50/50, which gives us a fantastic balance.
So, you know, we're well-placed for to maximize any uptick in sales, and certainly, you know, I believe that perhaps there's more growth currently in the sales market than in the lettings market. Certainly over the next year, all our business is incredibly well-balanced to take advantage of that whilst having this significant recurring lettings revenue underpinning them. The revenue by area really it breaks down the sort of Central London, country and out of London parts. As you can see, our business is weighted towards London in terms of its revenue, with 75% of revenues coming from London. The part of this, which we'll go on to talk about, is you know, we're looking to invest to improve our network and bring in new talent.
Certainly in some Central London area, we believe there's significant potential to do that, and so we'd expect that with a hopefully improving Central London market in due course to expand that section of the pie. This one we really put in to kind of explain the context of the markets and hopefully give some qualification to it. These graphs show the number of applicants per property for the sales market and for the lettings market. We call that sales and lettings demand. As I was saying, I think lettings has been softer, and you can see that in the chart on the right. I think it's the right, where you're looking back to 2019 levels of tenants per property available.
And I think, you know, part of that is a more active sales market, so people are more engaged in that rather than renting properties, and as I said, the other factors are, you know, we've come to perhaps the end of the pandemic tendencies, and some of those prices are perhaps overshot, and so people are not taking on the new rent. On the sales side, what you've seen is it's really been supply-led transaction increase, so sometimes, and particularly, we got used to over the sort of ultra-low interest rate period of it all feeding through into price increases and price increases driving demand, but I think this time around, it's driven by supply, so we're seeing more properties on our books than we have for five years. I think that's drawing out buyers.
I think you've got two things, you know, going on. People are motivated to make changes in their life because there are increased costs, and people are looking at how they manage them or changing what their decisions are in life, and so bringing their properties to the market, and on the buy side, you know, there's solid employment and real wage growth. So that's a supportive environment for buyers, but clearly, with the increased costs of a new era of interest rates, which won't go back to the sort of ultra-low ones we've become used to and other increasing costs, you wouldn't expect that to feed into price increases, and really, by seeing that balance, you know, you can see that it won't.
I mean, if you look at the beginning of 2022, where you're talking 12 per sales property, you can see that's where, you know, this is where the boom was, post-pandemic, and that's where we saw rapid price increases. So that should be a forward indicator.
From a particular interest to a shareholder point of view, this chart sets out the dividends that we have paid out to shareholders since 2012 in H1 or declared. Basically, it shows quite clearly the fact that we like to pay continuous progressive dividends. 2020 was the pandemic. We were one of the few companies amongst our peers who continued to pay dividends during that period. Clearly, it dropped down below the 2019 levels, but when the market picked up massively in 2021, we were able to repay a special dividend and return money to shareholders on the back of it, and we will look, as I said, to continue to pay progressive dividends as long as trading conditions permit.
So really, let's get into the drivers of growth of Winkworth. So we talked about there is an improving sales market in terms of transactions, but there are other things that obviously we are working on to push the company forward. And we've categorized these as four parts, really. So we have new franchising, which you know is basically new people coming to us, worked in a been employees looking to be an employer and become a franchisee under our banner and are within our systems. There's also existing independent estate agents that are looking to grow market share by plugging into an established network and brand. Assisted acquisition support, which is where we have a number of very successful franchisees and who we're happy to support grow their businesses.
So we will help provide funds, via loan, to help them acquire other businesses, or lettings portfolios, so they grow their revenues and their business, and obviously, we benefit from the terms of the loan and the 8% on the new revenue generated from the venture. There is portfolio management, which we've been accelerating our investment in. We see that we have a very established long-term business with lots of offices. We have an opportunity. Some of those offices are reaching the point where retirement, having been the franchisees for 20, 30 years. There's a significant opportunity there to bring investing class talent, which can push those businesses on to far greater heights and again, generate a significant increases in 8%.
But more than that, generally, they will then go on to open further offices or acquire further businesses, and so, that generates an internal growth for us as a business, and it's something that we are working hard at, providing exits for existing franchisees, and headhunting new talent. The owning businesses, as I briefly said, this is in partnership where we have an opportunity, and then we analyze the markets we're in, we cover, and the Wink franchises, and we have the right person, we might acquire that business, and they'll earn equity in that business for delivering revenue targets. And as a benefit, we obtain increased 8% and a greater share of revenue from a very important marketplace. So sort of onto franchising.
This is the charts over the last few years, since 2018 , showing the ebb and flow of offices grown and closed at Winkworth during that time. I suppose it's important to say we're not scared to close offices if we feel they are not performing or not working within the system as they should be, with a view that we're confident to reopen them in due course, and work with the ones that are successful to help them make better. So first half, for the first half of this year, we've opened three new offices, which sort of fall across a couple of the camps I explained, really.
Leamington Spa is a brand new office with a very successful chap who wants to go out on his own and previously been an estate agent for many years, wants to go out on his own, have his own business, and he's come to us. St. Leonards is an addition to a very successful franchisee, our Exeter franchisee, who we helped acquire a sort of business, mainly lettings business, which is rebranded and become Winkworth. Stoke Newington, which is again from, I think, probably our most successful franchisee. We sort of provided some funds to help him launch another office to develop the territory he's been granted. Then on resales, which comes into the portfolio management part of things, you know, we've had...
So our very successful Tooting operator has acquired our Streatham and Herne Hill offices as part of his sort of journey to owning his own business. And then others have acquired Hendon and Kennington Lettings, all of which we will see, foresee significant uplifts in revenue due to the skills of the operators that are now on board. And then looking forward, you know, it's, it's looking fairly, well, it's looking positive, really. We have, you know, 12 offices, 12 new franchisees, I should say, coming onto the network who we feel will add value. They will, 7 of those are resales where we feel they will significantly increase the revenue of the offices that are currently there, and 5 are new offices. So, things are looking positive on the franchising front....
Then we sort of did this last time with different people, and we thought each time it's good to pick out a few people to give a flavor of, I suppose, what we're talking about when we say investing in people and who they are and what their stories are. As I said, Ian Fraser, who recently opened Stoke Newington, you know, he was the manager of the West End office for us. At the time, his office wasn't performing particularly well. He took that on and is now our... He opened Highbury, and that is now our top-performing territory for Winkworth. So he's sort of shown his skill. Since then, with our support, he's acquired the neighboring Shoreditch and Hackney businesses, which have all sort of increased significantly.
And then most recently, he has obviously opened Stoke Newington again, which we have high hopes for. So we've sort of helped him achieve his ambitions, we hope. He may have more, but and benefited from that significantly ourselves, not only on loans, but also on the 8% and the reputation enhancement of turning these offices into market leaders. Adrian Chipa was. There's all slightly different examples. It's probably why we put him there. Adrian Chipa were existing business for sort of 20 years in Kingsbury, and they converted to Winkworth, which we have a model where we provided funds equating to three times the 8% as a payment to say for the goodwill they're bringing on board and giving to us on day one.
Since then, they've doubled their revenue and have gone on to most recently buy the Hendon office, where we believe they will put their magic touch, and we'll see a significant increase there, too, and then, finally, of the three, is Chris Baker, who I've talked about a few times in this presentation, is our Exeter franchisee. He was the youngest-ever franchisee when he opened the Exeter office as a cold start. Since then, he's now has a network of four offices that we've helped him acquire, providing sort of funds where necessary. And all of those have been going incredibly well, and I think there are further plans afoot, so he may feature on future presentations, too.
Really, this is the owned businesses' story in terms of revenue over a number of years. It started with Tooting. It was a business that was doing. Tooting is an area we identified where there's a huge amount of transactions, and we had a poor underperforming office, I should say, with a franchisee keen to exit. By using this model and acquiring it with Charlie Mitchell, our partner in the venture, he grew that revenue to at one point, when the boom of 2021, GBP 1.6 million. We've subsequently gone on and applied the model to Crystal Palace and most recently, Pimlico. They've all, they've been growing these businesses. They're not all at full capacity in terms of profitability. We expect them to...
They will be delivering profits this year, but we expect to really push on in 2025 and beyond. We've secured some really good talent into the business that enhances our reputations, delivering extra revenue, and, you know, we will work with them on their journeys and aspirations, what they want to do, whether that's stay with us, buy the businesses off us, or go on to do their own Winkworth franchises, then we are open-minded to how we work with them.
In terms of the chart, what you can see is the benefits to the network revenue of opening up these owned businesses. Dominic's talked about Tooting, Crystal Palace, and our Pimlico office. The Pimlico office will make a loss this year, but we expect it to make a loss this year. It's in its first full year of being on board. We will be and are investing upfront in it. We expect it to make a loss this year. It will then start trading profitably, and we expect it to take roughly three years for an operator to turn the business round.
The other element that we haven't particularly talked about is our development and commercial business that generated almost GBP 400,000 of revenue in H1 of 2024, up from about GBP 200,000 last year on the back of some strong new homes sales and a slight uptick in the commercial market.
And just to clarify, I suppose, with that one, that's part of the, it's part of the business that is not in the franchise agreement, so it is a sort of greenfield territory for us to develop that hopefully can grow significantly and deliver benefits to franchisees by feeding sort of new homes that can be jointly sold with them. So I would put this in just a sort of update on the, I suppose, the Winkworth competitiveness in the marketplace. So our operating area market share, we pulled out some graphs from a third-party data provider to the industry called TwentyEA. So what this shows effectively is we're the largest agent in the area we cover in our patch, in our operating area by sales agreed in the first half of last year.
It shows Winkworth share of the market, and our operating has risen in all our metrics. So we've actually been, we were actually the same last year, but we're growing our market share in new listings, sales agreed, and exchanges in our patch. So hopefully, we will continue to be number one in our operating area. The graph on the right, again, that just shows that of the top 10 agents, we took a sample of them that operate in our area, the percentage growth of new listings, and again, hopefully shows us pretty favorably compared to our peers, that we are growing our market share, and so our model and our efforts are working.
And then really it's just to say, you know, over, if you take a longer period of time, and we've put out some information, and it shows that nationally, our market share of SSTCs or sales agreed has increased 36% over the past five years. And then, this is some further information on us. This is sales performance metrics in the Winkworth operating area. So, this is against, the average. So you can see that, you're more likely to agree a sale of a property with us than, than you are at the average agent. Well, the average of the area, more likely to exchange a property, less likely to withdraw a property, less likely to have a price reduction, than the competition in the operating area. So hopefully, those are all quite positive metrics.
Then finally, you know, something we're, I suppose, quite proud of is so far in 2024 , Winkworth has the highest conversion rate from new instruction to exchange of one million plus homes out of the top 10 estate agents in London. So hopefully, that reinforces our ambitions to maintain ourselves as a prime agency and do a good job for clients at that level. So the next part is obviously ever-increasing in terms of the digital evolution within the industry. And really, we sort of put this slide up to show our efforts. I think the important things to draw out of it are that we've been spending quite a lot of time pulling our databases together, which gives us the platform to then start a sort of digital journey to create efficiencies.
What we have started at is creating those efficiencies within our service to our franchisees so that we can make it simpler, easier for them, and more efficient for us in our relationship and how they get the data they need off us for their businesses or the contracts by automating some of these processes. That's been possible by bringing together the various data sources of the websites, the CRMs, et cetera. Really, the second part is then to look at the sort of digital journeys of our clients and look at how we can improve, create efficiencies there, obviously, while respecting very much so the added value of our agents. We do believe in areas such as, well, for example, you know, your property management or your financial services.
There are areas where you can create efficiencies using technology and perhaps in due course AI to help the processes. So there's an awful lot on that slide, but I think that's the summary of where we are as a business which is looking to evolve. We obviously keep our people front and center as the most important people in our business, but evolve the platform they're on digitally as well as personnel-wise, to ensure that they have the best offering in the market. So lead generation from Winkworth, this is just, you know, it's obviously this, the heart of the business in some ways in terms of, you know, this is what we're sort of kicking out leads to our franchisees from.
You can see on the basic level, you know, it delivers 2.2 million visitors in the first half. So it's a fairly big entity. I think it delivers some 3,200 valuations to franchisees in the first half, so that's a significant part of the valuations they get to hopefully retain the instructions to generate their business. So we see the investment in this, you know, is ongoing, and we always want to make sure that it, well, like our aspiration, that it enables them to be in the top three by providing them the best platform for their business and the most leads that we possibly can. So really, that sort of leads us to looking back and looking ahead for Winkworth.
So, looking back, you know, we've gone with this. We had a strong first half, it was in line with management expectations. You know, we've continued to, and accelerated really our plan to recruit new talent to create significant uplift in revenue, and we'll continue to accelerate that as we think it is fundamentally the most important thing to do to get the best people into our business. And we opened three new offices. We resold four, three of those in London, where we see, you know, there is a more significant uplift potential in London markets, perhaps because of the nature of London and the density of housing. And we've evolved the PLC board with the appointment of two new non-executives and a new executive director, to put us in good stead to accelerate our programs going forward.
Second half of 2024 and beyond, this is a repeating aspiration, obviously, but it's how we sort of set ourselves up, as we believe, which is to be the first option for agents wishing to set up their own business, operating in prime markets. We want to, as we explained, continue to invest in the platform really, digitally and elsewhere, to ensure that it is competitive. We remain very much a people-led business, and the decisions we make are guided by the talent and the availability of talent, that we can headhunt, find, come to us. We have targeted new equity participation business, in a new area, potentially, that we'll be exploring going forward. We have a number of new franchisees in the pipeline.
We see further growth and profitability derived from the majority-owned offices. We see this trend of transactions rising as a result of the increased supply without price increases continuing into next year, and feel that we're still in a very strong position as a business with a strong balance sheet, which enables us to have freedom of choice on the investments we want to make. I think that's our presentation. Hopefully you enjoyed that, and then I think maybe we'll be on to questions.
Perfect. Dominic, Andrew, if I may just jump back in there, and thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that's situated on the top right-hand corner of your screen, but just while the company take a few moments to review those questions that were submitted already, I would just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard. Andrew, Dominic, as you can see, we have received a number of questions throughout your presentation this afternoon, and thank you to all of those on the call for taking the time to submit their questions.
But guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and if I pick up from you at the end, that'd be great.
Hi. Yes. Right, sorry, I had some chance to look through the questions. So, you mentioned landlords exiting the market, which since improved. Is the improved sales revenue a function of landlord exits versus a more buoyant market in general? Yes, I do believe that landlords are exiting the market. I don't think it's the dominant factor in increased transactions. As I said, a significant part of the supply, I think it's all right would actually say, is coming from the sort of family house market, and I think that's due to needs. You know, people are motivated to sell or downsize. You know, cost of fuel has gone up, the cost of mortgages on those properties has gone up, and I think those are all drivers. Clearly, there is an element of landlords.
I think as a geographically, it's probably more affected in London than it is outside London, where I think there are new landlords, new buy-to-let investors, many more new buy-to-let investors than in London. So, I don't think it's the driving force, I think they are part of it. Next question. Given that the network lettings revenue grew by only 4%, while sales revenues grew by 9%, is there a strategic shift towards sales, or do you see this as a temporary trend? So we sort of are very proud of the fact that we have a good balance. You know, there are at certain times, different parts, sales and lettings operate differently. You know, traditionally, in poor sales markets, lettings takes off because people aren't committing to buy, so they're letting.
So, people aren't selling their properties, so they might be putting them on the lettings market. So they are so entwined, and to have that balance enables us really. It means that we've got full teams across every office in both sectors, so just means we're well positioned. You know, we focus on both equally, we think they're both very important. The recurring revenue of lettings is fantastic and, you know, very much underpins our franchisees in this business. But there is an opportunity for those focused on sales as well, to benefit from some increased transactions, we hope, as interest rates go down.
So a question from Maynard. Exclude the one-off GBP 350,000 franchise sale fee, and pre-tax profit appears to have declined versus the comparable H1. Is that the case? And if so, what exactly is causing the costs to rise faster than network revenue? And when will greater network revenue translate into greater profit for the group? The simple answer is, on the face of it, yes, but a lot of that is actually timing differences. So we had, across the whole of last year, about GBP 350,000 in franchise resales fees coming in. For us, our third quarter is always a critical quarter. It delivers traditionally circa 35% of the profit for the group. And the health so far, it's looking positive on that, and we are on track to meet the expectations for the year.
Shore Capital, I think, have issued a forecast showing GBP 2.4 million of PBT, and we're on track for that.
Yeah, I think it's just important to say that oddly, in estate agency, transaction times seem to get longer every year. So that's always changing, moving things into H2. I'm not sure why really. There's lots of people to blame, but it just seems to be happening.
Another question from Maynard: Is the company-owned revenue of GBP 1.5 million included in the network revenue of GBP 27.9 million? And the simple answer, Maynard, is yes and no. The income from the estate agency offices, so from Tooting, Crystal Palace and Pimlico, is included. The income from the development and commercial business isn't.
Bear with me. This time last, the company claimed to have largest number of SSTCs exchanges among the top 10 London agents. Today, the company claim instruction rate of GBP 1 million-plus properties among the top 10. Franchisee lost ground to other agents, including the recovering Foxtons among sub-GBP 1 million properties. We were never the top, we're never the largest in London, but we were second and we are now third, so I wouldn't want to go into which ones are by SSTC. So, yes. What is the exit plan for Tooting? Management, we've expressed company-owned offices not for long term managed company-owned offices, but can a franchise realistically take on Tooting, given its past success and implied GBP 1.4 valuation from the final term purchase? Tooting's previous manager decided to become a franchisee elsewhere.
Why should another franchisee take it on? Was Tooting now destined to become a permanent training ground for new franchisees? I think we look at everything annually, really. We had a very successful partnership with a chap who wanted to seize an opportunity to neighboring franchisees, and we supported him financially to do that because, you know, it's what he wanted to do. There are many routes to how we can transfer ownership should we choose, and, you know, part of that is people, timings in people's lives, steps they want to take. You know, they can climb the ladder of equity rather than make the whole jump in one. So there are many routes.
I think, you know, we've brought in new management that we're very happy with that in Tooting and clearly it's early days, and in due course, you know, there we'll be sort of talking to them about their aspirations. Really, that's the same. Some people have different choices. Some people like to work with us, and if that's a successful partnership and they want to continue to work with us behind them, then we're very happy with that. If the route is to have their own thing, then either we'll talk about the venture we're in or others to ensure they can fulfill their ambitions. Nigel mentions the appointment of the two new non-exec directors, both of whom are financial consultants with M&A backgrounds.
Seems obvious their appointments are to assist the board with M&A opportunities, especially after the high profile Property Franchise Group Belvoir merger. So what M&A input have the non-execs given to the board? And two, given the chairman, major shareholder is now 81 years old, how strong is the board's view that company should remain independent? Well, obviously, I think they are extremely successful individuals who will significantly help the company in all of our strategy, really. So I think it places the company in good stead to go forward more dynamically.
Obviously, I wouldn't want to sort of talk about individual situations, or plans, but no, that it really is part of, you know, the natural evolution of the board as we bring in new talent to ensure that we can do our best to push the company forward, aligned with the vision and values we hold dear. And then I think the final question is, "During this period, three new offices were opened and four were refinanced. How would you anticipate these additions will contribute to future revenue growth and profitability?" At the end of the year, we tend to do a slide on the success of what we call portfolio management or resales. At the half year point, obviously, to fill the data is correct, we would...
The new offices grow at different trajectory, depending on which office they are. They obviously all add into the mix. The resales, again, it depends. If you're in a Tooting-esque market, then that can be a very significant uplift on 8% to us. So we do know that they also have further add-ons, where they go and open further offices, and they go and acquire further offices. So really they are, the resales can become, and portfolio management can become somewhat compounding as more and more benefits come from getting these talented people into the network. The three new offices obviously will generate in line with their business plan, so they all hopefully...
What we could say, another way of putting it is, I suppose the resale of an office of us can be more valuable than the opening of a new office because it can be a quicker revenue growth journey than opening a cold what we call a cold start. So, they are as valuable, if not more valuable, than brand new offices.
We did a chart, as Dominic was saying, in the 2023 full year presentation. And just to give it a wee bit of context, the offices there who had change going back to 2018, some of them in 2023, they generated an extra GBP 250,000 of 8% revenue for us. So it's a substantial-
Mm.
A substantial part of the business.
There is actually one more question. Andrew, do you want to take that one?
Yep. So it's based, "So finance income, 63K for this H1 seems low, given cash continues to top GBP 4 million, and loans to franchisees have advanced to almost GBP 1 million. What interest rate is the company receiving from the cash and the franchisees' loans?" The franchisee loans are above base rate, with a minor exception. The bank interest, we have GBP 1 million on long-term deposit at the moment. It's an area that we're looking at to improve returns constantly, and I think the actual return had doubled versus H1 last year.
Okay. Well, I think that is the end of the question. So I hope you guys enjoyed the presentation. It's been great to have the opportunity to explain the company to everyone, and yeah, I will look forward to seeing everyone next time.
Perfect, Dominic. That's great, and thank you very much indeed for updating investors this afternoon. Could I please ask investors not to close this session, as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure be greatly valued by the company. On behalf of the management team with M Winkworth PLC, we would like to thank you for attending today's presentation. That now concludes today's session, so good afternoon to you all.