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(Correcting to clarify that the previously given GBP15 million to GBP20 million underlying profit before interest and tax guidance is for the current financial year ending September 30, 2024, not the financial year just ended.)
(Alliance News) - Watkin Jones PLC shares fell on Wednesday, after predicting only a breakeven bottom-line outcome, as it grapples with rising costs.
Watkin Jones is a London-based student accommodation developer and manager. Its shares fell 7.6% to 32.20 pence each in London on Wednesday.
The company issued a trading update for its financial year ended September 30, ahead of the publication of the results in January next year.
Watkin Jones said it now expects financial 2023 revenue to exceed GBP400 million and underlying profit before interest and tax to breakeven. Back in July, it said it did not expect to "materially improve" on the GBP2 million underlying profit before interest and tax it achieved in the first half of its financial year.
It said that since July's trading update it has incurred additional costs, including acceleration costs to ensure successful completion of two schemes. These costs are not expected to carry forward into the current year, it added.
Underlying profit before interest and tax guidance for the new financial year was maintained at the GBP15 million to GBP20 million range.
More positively, it said it has focused on operational and cost efficiencies within the business. This has included reviewing the overhead cost base and implementing a number of cost actions which will generate annualised savings of over GBP2 million in financial 2024, it said.
Looking ahead, Watkin Jones PLC said that whilst the current challenging market conditions are set to continue, the company's level of secured revenue for financial 2024 is about GBP330 million.
By Sophie Rose, Alliance News reporter
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