M Winkworth (LSE:WINK) reported network revenues of £31.6 million for the six months ended 30 June, down 1% against a strong comparator period in the first half of 2025.
Profit before taxation fell 5% to £780,000, after absorbing £110,000 of exceptional legal costs during the period.
The London-focused estate agency franchisor said network sales revenues dropped 5% to £16.1 million, while lettings and management revenue rose 3% to £15.5 million as franchisees adapted to the Renters' Rights Act.
Cash generated from operating activities rose 39% to £1.33 million, with the cash balance standing at £3.73 million at period end and no bank debt.
The board declared an interim dividend of 6.6p per share, unchanged from the prior year.
Looking to the full year, the company said underlying profit before exceptional costs is expected to be slightly ahead of market expectations.
However, it flagged £105,000 of legal and advisory costs incurred in the first half, with a further £376,000 incurred and committed between 1 July and 15 September, and warned that "further costs are expected, although the total amount remains uncertain".
As a result, the board now expects reported profit before tax for the full year to be materially below current market expectations.
Chief executive Dominic Agace said: "While the path of interest rates in the UK, more than ever a key determinant for the property market, is hard to read, we remain confident of our position and the further outperformance of our franchisees."
