Good afternoon and welcome to the M Winkworth PLC Full Year Results Investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated in the right corner of your screen, to simply type in your questions and press send. The company may not be in a position to answer every question it received during the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll, and I'd now like to hand you over to Dominic Agace, CEO. Good afternoon t o you, sir.
Afternoon. I'm Dominic Agace, CEO of Winkworth PLC, and this is Andrew Nicol, CFO of Winkworth PLC, and it's our pleasure to be here to present our 2023 results. So I thought I'd start by refreshing on the Winkworth model for those of you that aren't familiar with it. Established in 1835 as a brand, it started franchising in 1981 and was the first company in the U.K. to franchise. We've grown from a sort of central London outwards and now have 98 U.K. franchised offices. We own three offices ourselves in London, and we have 45 of the 98, 56 are in London and 45 outside, predominantly in the southeast and southwest. As the nature of our growth means that our sort of USP in the franchising space is the London coverage, which is fairly irreplaceable.
It was done a long time ago when costs were lower for an estate agency to open up in Central London. Our network has really grown off that, say, to markets that affiliate with London. Sellers in, for example, the likes of Winchester looked to London buyers to buy their houses for premiums, and so the appeal of being Winkworth for local estate agents is high. Our aspiration really is, as a business, to create a platform for independent businesses run by successful agents who've had previous careers before taking on their own business that allows them to operate in the top three in their marketplace. We believe in that because top three in terms of market share, I should say, for sales agreed. We believe in that because that means we believe that they have a business that is profitable through the cycle.
So we aspire to continually evolve our platform and combine that with meeting the sort of and bringing on board the best talent in the industry in partnership with them. Some key features of the model are it's a 10-plus 10-year contract, so 20 years with a right to renew after 10 years. We don't take the leases ourselves. The leases are taken by the local franchisee, but we have options on the premises that we could exercise should we need to. The franchise agreements are personally guaranteed by the franchisee. And from a sort of accounting perspective, all sales monies are billed and paid to us directly, and then we pay out to the franchisee. So that's obviously very good for our cash flow and ensuring that we don't have significant bad debt.
So that's a bit about the model and then into 2023 and how that panned out for us. 2023 was a year of a dramatic change in terms of the cost of finance, and that meant that transactions in the U.K. market dropped. Despite that, our business remained very strong with lettings being around 50% of our business, picking up a large part of the slack, and being the record lettings year we've had. We're also the largest sales and lettings agent in the area we cover. We did exit some franchisees, but that provides some opportunities for us to refranchise those areas with new talent. We opened four new offices, and we added another one of our new offices that we own in partnership with what we call an entrepreneurial manager.
So that is a model where they receive equity in that local business in return for delivering revenue and allows us to bring tons of people into the network that may not be able to afford the costs themselves. And finally, I suppose we have to acknowledge that in the commercial business, it was a very difficult market, one of the more difficult ones in the last decade or so, and so that didn't progress as we'd wished. So that's a broad overview, and we'll go on into that in further detail. But over to the numbers with Andrew.
Thank you very much, Dominic, and good afternoon, everybody. In terms of the headline numbers, network revenue across all the offices was GBP 57.8 million in the year, down 8% on 2022. Within that, sales, as Dominic has alluded to, had a tough year. They were down 20% to GBP 27.6 million. But lettings, again, as Dominic has alluded to, had another record year. They were up to GBP 30.2 million for the year. And the overall split for this year was 52% lettings, 48% sales. In terms of the Winkworth actual revenue that's sort of shown in the accounts, it was flat pretty much with last year at GBP 9.27 million. Within that, inevitably, some ups and downs. On the owned offices side, it was down by about GBP 90,000 year on year. Within that, our Tooting office was off by GBP 125,000, impacted by the sales market.
Our Crystal Palace office, on the other hand, which is sort of earlier on in its growth cycle, was up GBP 135,000. The Pimlico business that we acquired, and we'll talk about in a bit more detail later on, introduced GBP 75,000 of income before the year-end. Our development in commercial business had a tough year, and that income was GBP 170,000 down versus the previous year. On the franchising side, the 8% drop in fee income from sales took about GBP 500,000 off our income. That was partially offset by the increase in lets, which added GBP 110,000. Overall, franchising was up slightly on the previous year on the back of some license fees we collected from franchisees, both for early terminations and for new franchises being sold across.
Our Asia Pacific desk returned to life, had a very strong year in comparison with the previous year, and that was up GBP 120,000. Cost of sales was pretty much in line year-on-year. Admin expenses across the group were up by about GBP 600,000. That was sort of GBP 350,000 from the owned offices on the back of some increase in Crystal Palace as a result of them gearing up, increases as a result of bringing the Lumley 1 Pimlico business on board, and increases in respect of the development and commercial business, a lot of which was attributable to the new homes business that we launched in the year.
On the franchising side, it was up GBP 250,000, largely on the back of salary increases for staff, a general pay increase, and some catch-up on some underpaid, under-rewarded staff from previous years, and a sort of a GBP 50,000 general cost inflation impact. We generated a GBP 250,000 profit from the acquisition of the Pimlico business, meaning that the profit before tax for the year was very much in line with management expectations at GBP 2.15 million. We had GBP 4.55 million in the bank at the end of the year, and we declared dividends up 6% versus 2022 at 11.7p.
So we thought we'd put this slide in to show sort of the different activities, the different parts of our business, as well as sales and lettings. We have different geographies that operate at different times in different markets. So I suppose what you can see from this is on the sales side, outer London as we would call it, was more affected than other areas. I suppose our view on that is it's an area where there is lower affordability, and so it's more affected by the changing cost and finance. What we did see is this didn't lead to significant price reductions. Really, this was a feature that the seller side, the mortgage side, is supported after the reforms in 2014 and the stress testing, but it did lead to lower transactions last year in that sector in the market.
On the lettings side, you can see the different areas. Really, the country outgrew other areas. That's in large part due to the fact we also have supported acquisitions for portfolios for franchisees in the country, which boosted the lettings revenue. It was broadly a year of two 1/2 for lettings, where it's very strong, and some of the demand has abated towards the end of the year and the start of this year while still obviously being a positive market. This is just to share the breakdown of our revenues. As I said, we're sort of geographic and divisional, I suppose, revenue streams. In terms of divisional sales and lettings, we broadly inverted. Lettings grew last year, and sales shrank, and so the balance between the 50 to 48 or 46 to 54 switched. That's obviously a fantastic part of our business that we have this balance.
And then again, on the revenue by area, you can see the different parts of our business, the bulk coming from that outer London area where we're obviously very well long-established, mature businesses. But we have a growing section of our business which is outside of London, what we call the country markets, that we envisage will continue to grow as a section as that is really the focus of supported acquisitions, so where we help franchisees acquire further portfolios or businesses to grow their own. And Central London grew in a small manner. We expect further growth in that as the Central London market recovers. So really, this is a chart that I suppose is really a pricing chart as much as anything. What it's showing is the number of applicants we register per property we have to sell.
And again, on the lettings side, the number of tenants we register per property we have to let. So really, it gives you a five-year period, and you can see the different ebb and flow of demand, which in theory drives prices across both divisions. I suppose lettings is probably the most interesting. We have seen a drop in demand from the boom years where you had 15% price increases in rental price increases. I think we'll see this year, particularly in London, that we won't see price increases whilst there will still be growth in the market. On the sales side, broadly, you can see that the demand dropped last year. However, Q4 was clearly ahead of Q4 2022, r eally, last year, I suppose, was a story where there were several moments of inflation fears and where interest rates would peak, particularly in sort of June.
That took sort of three months or four months for the market to settle down. Mortgages were withdrawn. Mortgages were repriced. They sort of settled back down over the course of three months, four months, leading to a slight pickup towards the end. And then clearly, in sort of January time, people saw that the trajectory was downwards for interest rates. So mortgage rates reduced then, and we saw a pickup in activity of 23% of sales agreed in the first quarter of this year versus the first quarter of last year.
In terms of our returns to shareholders, for people who don't know about us, we aim to pay quarterly dividends, and we aim to pay a progressive dividend as long, clearly, as trading conditions permit. And I think this slide shows very clearly that performance. The white line shows the revenue growth over the period since flotation. The bar charts show the amount of pence per share paid out in dividends, special dividends, and there was a capital reorganization in 2018.
I really wanted to articulate the different drivers in growth of our business and the routes we are to push revenue forward as a business. So we see this as sort of four-part, really, new franchising, which I suppose is the most obvious one for us, which is new people approaching us who have worked for another agent and want to have their business on their own, and they're looking for the support we can provide them and find a site to open a business. It also includes agencies converting to Winkworth where they're looking to grow their market share. It also is franchisees opening second offices. On the assisted acquisition support panel, that is really where we work with trusted franchisees who have a track record to support them financially to acquire further businesses, in particular, lettings portfolios to bolt into their business.
The owned businesses is the section of our business where we work with entrepreneurial managers who we own the business, but effectively, they gain shares in that business for delivering targets. That may be over the course of several years and includes Crystal Palace, Tooting, and most recently, Pimlico. Portfolio management is sort of a new area we're looking to, again, articulate the work we do within the business to ensure there's a healthy and strong network and that we regenerate. We're a very old business, and there's a great opportunity bringing in new blood in certain areas who can take the businesses forward, and that has a meaningful impact for us.
So we tried to articulate this in the slide, which I will leave Andrew to walk you through, try and demonstrate the last five years of portfolio management and the sort of impact it has on our revenue, and hopefully, will do going forward.
Just sort of taking the overall logic of the slide, there's revenue on the left-hand axis and time on the bottom axis. It's looking at progression as moving from left to right, left being 2018, right being 2023 last year. In 2018, the offices on here that we resold to new managers were generating about GBP 7.7 million of network revenue. We've changed those operators, and they have improved their performance. Not only have they just improved the performance in the particular offices that they took over, they have opened additional offices as well, such that in 2023, the same group of original offices plus the new offices they had opened were generating an additional GBP 3.3 million of network revenue. That's an increase of 46% across that period.
That's a sort of a level of increase that should be, as long as they continue to perform, bedded in, and be increased each year as we go forward.
Is this worth saying? I suppose this is more. We've had a much more proactive focus on this in the last few years. We're keen to have a market for franchisees to exit. And that means, from our point of view, and making sure that when they do exit or wish to sell, that we get the best-in-class in place so that every time there is a sale, we go forward as a business, really. And so we expect many more to join this graph over the next couple of years, as we implied in our statement. And hopefully, that will be a good driver of growth going forward. Really, we talk about people, and people are the most important thing in our business. And our franchisees are clearly the most important people in our business.
So we put the slide up there to give a bit of a flavor and a couple of stories of places where we've invested in people and the results we've got out of it. Charlie was our first entrepreneurial manager. In Tooting, he launched it. It was doing GBP 200,000 when he took it over. And when he left, it did GBP 1.6 million. So he is very capable as a person. He has now decided to take the next step and will be hopefully owning two franchisees himself, Winkworth franchisees himself, which will hopefully also benefit from as he delivers on them. And we've brought in the next entrepreneurial manager into the Tooting seat to take the journey forward. Lucy was from an established agency in Bath with her partner, Matthew.
They acquired the Winkworth business in Bath, and we had a small part helping them to do so with a small investment. They had then gone on since then to buy a lettings portfolio in Bristol, which we provided some monies towards to help them in partnership with the bank acquire the portfolio. From a revenue point of view, when she joined, it was GBP 111,000, and they currently generate GBP 800,000 of revenue. But it is early days, and we feel there'll be more. Our Norfolk team, Jamie and Kyle, who are sort of very much stars of the area, we invested a small amount of money in helping them open each of their offices. And they opened a number, over four offices, since 2019, I believe, and taken revenue, obviously, from zero to GBP 1.4 million, and have plans to go forward again.
So really, it was just to show where we believe the success we can get if we help people who are talented, who may not quite have the full funds themselves, but where we can help, we can gain great gains. And part of that is we are entering into very long-term relationships, partnerships with them of 20 years. So the money we put in is obviously there's plenty of time for that to come back and plays in dividends over the years. So this slide, this shows the ebb and flow of the franchise network over the last few years or since 2017. As you can see, we, you know, growth, we also have some closures. So it was part, really, of us. What we want is a healthy and strong network.
So we know that as a business, if we have offices that are perhaps underperforming or struggling, that does have a knock-on effect on our network. It also has a knock-on effect on our future growth because clearly, if we open a seat to open an office beside one that is not trading as well as perhaps it could be, clearly, the position is, why would we open with Winkworth if the neighbor is not operating? So to have a strong network, we're happy to walk away from certain markets. And there's always a different story behind each situation. We're happy to walk away from different markets with a view that we're confident we can come back and we can go and find the right people to push on the next time.
So really, this is a chart on the owned businesses where she talked about, so Tooting, Crystal Palace, Pimlico, and development and commercial. Hopefully, it shows a trajectory. Last year, it moved backwards slightly. Really, being frankly, it was due to the commercial market, development of the commercial business. It was a very difficult market. I believe that going forward, it'll be a great asset to this business. As the markets improve, but clearly most affected by interest rate rises as it's an investment-only product. In terms of just the others, market share, just to sort of fill everyone in, Crystal Palace was, end of the year, fourth in its local market. Obviously, our ambition is top three so far this year. It is second, pretty close to first. Tooting, with the changes, was second last year. Hopefully, we'll get it back to first.
Again, it's in the top three. Pimlico is very early days, but the signs are hopefully pretty promising. We are optimistic about the future. Really, we've just put this in to talk about just acknowledge the it's part acknowledge that we're evolving the business and the platform, and p art of that is digital. Part of that is digital infrastructure, which Andrew will talk about. Part of that is digital marketing. We normally put up a slide, which I suppose doesn't change much, so we don't continue to put it up. But if you type in estate agent in Fulham or estate agents in Pimlico, perhaps we should come up in the top three of that search, which delivers a huge amount of leads to our website and then onto the franchisees as valuations and hopefully instructions to sell.
But social media is also of growing importance. So we thought we'd just share that. We have, across our network, 90,000 followers. It is growing. We're working on sort of new fun initiatives like we have a driver who we supported since Formula 4. It's not just us. It's us and the network, which is surprisingly a good way of linking without being overly expensive our brand to another brand, an industry that we suppose is complementary for being a prime business and also having a link to an influencer that can help support our social media as well as events at the Williams factory and tickets to Silverstone through social media for our franchisees. So this is more just some statistics from TwentyEA, which seem to be the industry source at the moment. It shows that in the area we cover, we're number one for sales agreed.
We're number one for Lets agreed. And the third one, which is, I suppose, more nuanced, but really what it shows is the nature of Winkworth. So it's about efficiency. So we sell more than ever on par one across London of what we list. So we set expectations, hopefully, as a business, and we deliver on those expectations. So that means that we're generating long-term goodwill within our local communities rather than perhaps short-term gains. So I sort of put that up as a point of interest.
As Dominic has said, it's not just the people. The people are very, very important, but the platforms that they're operating from and through are also very, very important. And we have a vision that we will, as a group, have strong local excuse me, strong local agents who are properly embedded into their local areas, who are supported by very, very strong, effective tech. It's a way of future-proofing the business and a way of making sure that the offices can be as competitive as they are able. We're continuing to invest and getting our data into one source from all the different areas that we use.
We've been able to link up our CRM system with our website so we can see a sort of, for want of a better word, cradle to grave transition between people linking up to the website and coming through, ultimately, to sell or lease their properties through Winkworth. With the data in the one place, we can work out how best to use it. That's the next stage of the iteration. It'll take time to really come to fruition, but it's a sort of a journey that we're on that we'll be investing in over the years to come. That will support franchisees, enable them to be successful, and it'll help us as the franchisor get a sort of a network-wide view about things and improve our decision-making as well.
In terms of the sort of specifics about adding value to the franchisees, this is just one example, a sort of a tangible demonstration of the investment into the digital side of the business in action. This data is provided to offices on a monthly basis and has, at a glance, the key stats for each individual office. It's basically a tool for agents going out on valuations to be able to be absolutely up to date and provide part of the story and convince people to go with Winkworth. It also, at the sort of franchisor level, gives us an overall view of what's working, what's not working, and what can be improved. The website is absolutely critical to this. We've invested a lot over the years. Winkworth was, I think, the first estate agency to build its own website back in the 1990s.
We've taken it on from there. We've invested, as I say, in the platform. We went in 2019-2020 to a new platform that's enabled us to take things to an increased level. The number of leads generated, valuation leads in particular, generated by the site has increased over that period. We get about 500 to 600 valuation leads a month through the website, about 30% of leads into the business on that basis. The new website, it launched at the time of the pandemic, pretty much. So sort of 2020, 2021 pandemic and coming out of pandemic are a bit of an anomaly. But I think 2022 and 2023 are heading back to more normal levels, and you'll see that they are at a step change from where we were back in 2019 pre-pandemic.
So I suppose, in summary, it's to look at where we've been last year and where we're going. I've sort of gone through last year, I suppose, here. Winkworth remained a strong business. Our lettings performed a record year. We continue to pay a progressive dividend. Our profit for taxation was down, but we felt we outperformed the general sales market. We kept a clean balance sheet. We did open four new offices, and so we made progress on our strategy of bringing people on and working towards having the best possible people in the best possible seats throughout our network. So going forward in 2024, the aim for us, these are ongoing aims, clearly. The aspiration for us is to be the first option for agents which own business operating in prime markets.
We want to continue to make sure that we continue to deliver our end. So we want to have a platform that enables our franchisees to be in the top three in terms of market share within their area. But we are a people-led business, and we recognize that. And we spend a vast amount of our efforts to ensure that we get the right people in and proactively go and find them where they may not have applied. Our target is we target to have a new equity participation office in place. We're looking forward to those Entrepreneurial Managers having shares in those businesses, and we're looking forward to their growth as they go through the development stage to maturity and hopefully significant profit contributors. We target six new franchises each year.
That is driven by the quality of the people we meet and the markets that they're looking to work with and whether they affiliate with our business. We seek to build on the established network we have in a complementary manner. We see Central London improving, which would boost that part of the pie chart. Actually, this year, I think some of the highlights, as has been sort of in the press lately, is London has perhaps outperformed, which obviously places us well with 75% of our revenue coming from the London markets. Finally, cash and balance sheet strength positions us well. So we have the funds we feel to execute the strategy or to deliver revenue going forward. So I think that's our presentation. Hopefully, well, look, I look forward to answering some questions in a bit if there are any questions you have.
I hope that was of interest.
Perfect. Dominic, Andrew, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab, which is situated on the top right-hand corner of your screen. But just while the company takes a few moments to view those questions that have been submitted today, I'd like to remind you that the recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. Dominic, Andrew, as you can see, we have received a number of questions throughout today's presentation. And if I could just hand back to you just to read out those questions and give responses where it is appropriate to do so, I'll pick up from you both at the end.
Sure. Perfect. So the first question we had, I will read out. Forgive me if I, my reading. Okay. The furthest north franchisees are currently spread is Northampton. Is this by choice, or is that because no suitable franchisees have come forward? Crystal Palace and Tooting have demonstrated over a period of time the shared equity approach has been beneficial to both franchisee and shareholders. Appreciate regional hubs have expanded with financial assistance, but still no new shared equity recruits. The current market has encouraged many entrepreneurial agents to go solo. Many have joined the eXp UK network. Will we expect to see some more shared equity venues to improve revenue? And if not, why not? The regional hubs have been successful. Knowledge has expanded rapidly with healthy sales inventories.
Always a clear and present danger that the urge to have one's own name above the floor, the door, outweighs the benefits of being part of the Winkworth family, that can't be helped. One, of course, way to head this off is to invite those high performers onto the board, share options, etc., to keep them fully vested. Yet there's a singular lack of representation of the top performing franchisees on the board or on a share register with sizeable holdings. Why is that? I will sort of try and break that down into a couple of sections. Forgive me if I miss some of it. In terms of expansion and where we go, I hope to look at Kim Costa. We're very much guided by talent. We have talent and geographical fit, I suppose, the big drivers for us, and t hat will guide us.
We'd like our business to grow, as I said, in a sort of lily pad manner, so that each one has the best chance of benefiting from the previous one's goodwill. In terms of the entrepreneurial partnerships, we're very much looking forward to them having shares. As I said, Charlie, who we had a little picture of earlier, he delivered that journey and it's worked out fantastically well for us. He's received some funds for selling those shares back to us and now is looking to own two Winkworth franchisees himself. So in some ways, that's the perfect story for us of a journey bringing talent in who perhaps didn't have the funds and now has the funds and is going forward. So we're very aware of that.
We do want, people are very invested in they use their own businesses locally, and we believe that is where the incentive should be, particularly with our owned offices. Their shares in those owned offices is where they're going to earn their monies and where their whole focus should be. So we do feel that there is significant rewards there. And I think the other part, we're keen to get talent into all parts of our business. South London has been where new talent has come in, where other opportunities, perhaps, for a franchisee exiting comes in. We'll work very hard to ensure we get the best-in-class in there. And if that needs help on our part to get them in, then we'll do so because the benefits are so significant over such a long time.
And then in terms of sort of the feedback loop, I suppose, we do have picking one or the other to be on a board, it doesn't seem right. We do have forums, multiple forums, where we engage monthly with the talent within our industry. And we do that to get feedback on any of the issues of the day. So we make sure we integrate their view into our business decisions and our strategy going forward. So I suppose I feel we have the setup at the moment and the commitment through the local ownership of shares that will secure the talent going forward. I hope that covers it. And then next question. Foxtons, they claimed sales market share growth in Q1. What is your view on this with respect to competitive pressure, or is this just noise in one quarter? Yes, I'm sure. I don't know for myself.
I mean, if they said it, they obviously did. I think we're a different type of business in many ways. I suppose in London, we're very long-established with goodwill in many areas. So I think in some ways, it's positive for us because the more challenges there are for independent businesses, the more it gives us talent. There was a period of time where there were Purplebricks when they launched. They were actually a sort of feeder of franchisees to us because people wanted to future-proof their business and have the support of us to be competitive. We look at all these things as opportunities, and I suppose we back ourselves as mature and established agents in London to meet them. Next question is, y ou mentioned in the R&S final results that there's a big problem in Central London of Airbnb versus lettings.
Can you expand on this and detail the situation as you see it? The legislation which has been enacted in other universities and Airbnb is unlikely to come here, in my opinion. So I will carry out saying this is, I think, the chairman's statement. So I will try and clarify the thinking behind it all. I think, I mean, it is Airbnb and short-term rentals, I suppose, across the U.K. is a threat to the long-term rental market because people are looking to it for greater returns, and in particular, in London where the yields are lower. To get a greater yield, people were turning to that market. So it is a threat for long-term renting stock availability. And I think that was what he was conveying.
Clearly, I think there's lots of legislation being looked at around it to ensure that there is a healthy short-term rental market for those international businessmen and those that want to come and visit London without competing directly, not taking it from the long-term rental market. So I think he was looking at that as a sort of industry challenge. And because Central London is the most popular internationally, most significant there. So hopefully, that answers that. And then this might be one for Andrew. Gross franchisee income per branch was circa GBP 580 for 2023. What is the high-low range of gross income per branch within the network? And what is the level of management to consider a branch to be underperforming?
It would be very helpful if management could formally disclose gross franchisee income per branch as KPI so shareholders can monitor the board's plans to revitalize growth ambition within the network. I suppose I mean, I can start on that and say it varies hugely what is acceptable or not. If you're running a business in Dartmouth, it is a very low-cost but low-revenue business. If you're running one in Central London or these prime areas in London, they are expensive but have high revenue potential. So to average it out, it's always a difficult one because it doesn't really reflect either, I suppose, is the cop-out to that one. But I think we can see what we can do in terms of transparency on that.
Part of the reasons why we're investing in London or the entrepreneurial managers is because we're selecting our markets based on the analysis of the potential of those markets. We do that because we want to make sure we understand that to have an investor as well as a franchisee, you need to have a higher revenue market to make room for both. So again, they've come into slightly different categories. London generally has a higher revenue per outlet potential than perhaps other markets. Clearly, when you get to sort of other cities, it's probably comparable, but the fees aren't quite as high. I hope that covers it .
I think, yes, one size, unfortunately, doesn't fit all. It's something we do look at. But there's not one key metric that we could apply to all offices fairly, really.
I think the other thing to say on that, I suppose, that's why we look at market share per area, really, because that's fairer. If you're sort of within the three of your area, then that is, generally speaking, there might be some exceptions, a sustainable place to be. And so that's why it's more we look at that. But that could be very different revenue in, as I say, sort of a Dartmouth to a Chelsea. And then how many company-controlled offices would Winkworth ideally like to own in, say, five years' time? Tooting successful, final 10% purchase value that offers a GBP 1 million plus several more Tooting-like investments can, in theory, make more of a positive difference to Winkworth's current GBP 23 million market cap than several more conventional franchise offices.
I think the answer to that is the agenda we started with these offices is to bring people in that are really good at what they do, who don't have the money. We are a franchise business. The better the people we have, the better our 8%. We want to maintain our model as a franchise business. We do see where opportunities come up, and we have done the analysis on the markets, and we have the talent-accessible opportunities to do this agenda. But we're also very wary that there is a development cycle for each office, and it probably is three years. What we're doing is taking a business that is not in top three, is perhaps lower down the level, and we're investing in it with the right people and resources to put it in the top three. That takes time to feed through.
So we don't want too many in a development cycle phase or exposed to the ups and downs of the market. As I say, when we feel they're established in that top three, we feel they're through the cycle business. So that guides us. We don't have ambition at this point to have. I suppose we would look at another one once we've developed, once we're sure that the Crystal Palace is delivering for this year and Pimlico is off and running, and then we might do. But then we would also look to probably exit one. So the game is not to be long-term owners of businesses. It is to bring the talent in, boost revenue opportunities from key markets where there are high revenue opportunities, and then let once you've got that 8% going for 20 years, then we can move our resources to the next place.
That's absolutely right. Next question. How has the digital investment benefited the group? Has this impacted and enhanced the competitiveness in local markets?
Hopefully, Benji, the element of the presentation on the digital side has sort of covered off that to a large degree. The top-performing offices use the website very, very hard to boost their business. It generates leads for them. They are able to go out and be very competitive when they're on their valuation visits to potential customers.
I think the data and management of that and marketing of data is increasingly important for our franchisees. So we're delivering the tools to offer them sell more properties than anyone in an area is a great thing to tell a client. There are various other things. Providing them that, they can also give some easy visibility to their business to understand how they can improve it if it needs to. But we do it in conjunction with them to make sure it is useful rather than perceived. Interest for the year was GBP 88,000, which does not seem a lot with GBP 4 million to GBP 5 million cash and GBP 600,000 loans to franchisees. Why not place some of the cash in short-term deposits paying greater interest? Also, what interest rate are the franchisees paying on their loans?
So to take the first part of the question, we have actually put funds on longer-term deposit towards the back end of the year. And that's something we're monitoring. We're balancing our ability to lock up cash for longer periods with our ability to actually be able to deploy those funds into building the business, as we've been talking about during the presentation, which might impact our ability to earn interest in the short term but will actually significantly improve the performance of the business in the longer term. Interest rates for the franchisee loans tend to be a certain amount over base. It fluctuates depending on where the business is based and what we want to do. For certain businesses, we will be very competitive on the rates. For others, it'll be very similar to bank rates.
Interest received GBP 80,000. Does that imply the average cash balance in the year was much lower than the year end?
It does fluctuate during the year, and typically, the cash does build up towards the back end of the year. That's a function, John W., of the nature of our business, where a lot of the effort, the activity, comes in Q3, which will determine very much how the year pans out, and into Q4.
On average, how many employees does each franchise do you have? Again, huge variation. Full-blooded is to sales manager, lettings manager, two negotiators each, property manager, lettings administrator, sales administrator. And at the smaller end, in a small village, it will be probably a team of two or three. So it does vary depending on the potential of the market, I suppose, and the decision franchisee how much they wish to push it. Could you please provide insight into the company's long-term strategies and initiatives aimed at addressing the ongoing trend of increasing admin costs per franchised office? The company incurs started around 2015. I suppose the I think if I get that right, that's the owned office per franchised office the company incurs. Is that owned office or franchised office? It's the company incurs it addressing the trend of increasing admin costs per franchised office. Right.
We don't have actual visibility of the costs per franchised office, but there is always an ongoing competitiveness to invest in one's business.
We can. Where we're able, we can do offer effectively discounted rates. So we, as the franchisor, will sign up to various providers and be able to pass on the savings as a result of our sort of scale onto franchisees where appropriate.
With Tooting, now the most innovative equity aligned owner has moved on. How can you ensure the subsequent employee agent continues the same momentum without the equity carrot? So the simple answer is we redo. So the lettings manager there is an important part of the business who's also, while not getting the headlines, delivered a fantastic lettings business that's grown significantly or 3+ times. So she'll be receiving some equity this year. And obviously, the new person in the hot seat on the sales side, that is the goal. We have a view that the management in these businesses can grow up to 10+% . So there is plenty for people to go for who deliver the revenue, really. I think that's all we've got at the moment, isn't it?
Yes. Perfect. Dominic, Andrew, just jump in there. Thank you for answering those questions from investors. Of course, the company can review all the questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to you both, Dominic, could I just ask you for a few closing comments?
Yeah. Thanks for joining us. Hopefully, we've tried to sort of articulate different parts of our business. We feel we've got a strong strategy with multiple routes, and we're going to sort of push forward with that. Hopefully, when you join us next time, we'll be able to kind of keep you up with the evolution and successes it delivers. Thank you.
That's great. Dominic, Andrew, thank you once again for updating investors today. Could I please ask investors not to close this session? As you know, we automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This won't take a few moments to complete, but some shall be greatly valued by the company. On behalf of the management team of M Winkworth PLC, we'd like to thank you for attending today's presentation. Good afternoon to you both.