Last checked at 2 Nov 2021 07:00
For immediate release | 2 November 2021 |
Watkin Jones plc
('WJ' or the 'Group')
FY-2021 Trading Update
Strong operational and financial performance; delivery pipeline enhanced
Watkin Jones plc (AIM:WJG), the UK's leading developer and manager of residential for rent homes, announces the following trading update for the year ended 30 September 2021 (the 'year' or '2021').
Financial highlights
· Operating profit for the year is anticipated to be in line with expectations.
· £430 million forecast revenue, which is slightly below expectations, but with a stronger gross margin, reflecting the timing of land sales either side of the year end.
· £125 million net cash at the end of the year, c. 50% above expectations.
Operational highlights
BtR and PBSA delivery
· All 5 BtR schemes (1,041 apartments) and 7 PBSA schemes (3,192 beds) scheduled for delivery in 2021 completed and handed over.
· Development works on track across 13 sites in build.
· Despite inflationary pressures, overall build costs are being closely managed and remain in line with our forecasts.
Accommodation management (Fresh)
· 22,220 student beds and BtR apartments currently under management by Fresh, an increase of 10.1% from last year.
· Positive customer satisfaction ratings achieved by Fresh during the pandemic, enhancing its brand.
Homes
· Residential sales of 79 homes in 2021.
· Affordable homes pilot on track - planning consents secured for 296 homes on sites in Crewe and Llay, Wrexham and forward sales of 182 homes agreed.
Strong institutional demand
Good progress made in securing forward sales:
· 3 BtR schemes (722 apartments) and 8 PBSA schemes (2,435 beds) forward sold since the start of 2021, with a total revenue value to WJ of c. £450 million.
· The above includes new forward sales achieved since our 6 September trading update, with a total revenue value to WJ of c. £227 million:
o 322 BtR apartments in Lewisham, South-East London, for delivery in two phases in 2023 and 2024, sold to L&G.
o 645 PBSA beds across two developments in Edinburgh, for delivery in 2022, sold to Singapore Press Holdings (a Singapore listed media and property group).
o 286 PBSA beds in Colchester, for delivery in 2023, to be built under a development agreement with Moorfield.
· 551 apartment BtR development in Birmingham and 295 bed PBSA development in Edinburgh in legals for sale.
Continued enhancement of secured BtR and PBSA development pipeline
Since our 6 September trading update WJ has:
· Secured planning consents for 877 PBSA beds on sites in Birmingham and Nottingham.
· Added further sites to the pipeline, which now has a future revenue value of £1.75 billion:
| BtR (apartments) | PBSA (beds) |
September 2021 update | 3,870 | 6,750 |
New sites secured: |
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Leatherhead (with the benefit of planning) | 214 | - |
Colchester (development agreement) | - | 286 |
| 4,084 | 7,036 |
Design changes | (72) | 106 |
Current | 4,012 | 7,142 |
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Future revenue value | £0.95 billion | £0.8 billion |
BtR pipeline
| BtR apartments | ||||
| Total pipeline | 2022 | 2023 | 2024 | 2025 |
Forward sold | 609 | 71 | 354 | 184 | - |
Forward sales in legals | 551 | - | - | 272 | 279 |
Sites secured with planning | 573 | - | 43 | 214 | 316 |
Sites secured subject to planning | 2,279 | - | - | 631 | 1,648 |
Total secured | 4,012 | 71 | 397 | 1,301 | 2,243 |
Change since H1-2021* | +45 | - | -184 | -23 | +252 |
PBSA pipeline
| PBSA beds | ||||
| Total pipeline | 2022 | 2023 | 2024 | 2025 |
Forward sold | 2,232 | 1,946 | 286 | - | - |
Forward sales in legals | 567 | - | 315 | 252 | - |
Sites secured with planning | 1,582 | - | 724 | 858 | - |
Sites secured subject to planning | 2,761 | - | 350 | 1,662 | 749 |
Total secured | 7,142 | 1,946 | 1,675 | 2,772 | 749 |
Change since H1-2021* | +1,825 | - | -688 | +2,099 | +414 |
\* The change since H1-2021 excludes 2021 deliveries.
· Our pipeline for BtR and PBSA deliveries for 2023 has been reduced as a result of Covid-19 related planning delays. However, with the growth in the 2024 and 2025 pipeline, our forward sale model still ensures multi-year revenue performance through 2022 and 2023.
Richard Simpson, Chief Executive Officer of Watkin Jones, said: "It's been a year of good progress for Watkin Jones. Our end-to-end development capability, combined with favourable market dynamics and our capital light business model, has enabled us to deliver a strong operational and financial performance. During the year, we continued to enhance the future value of our BtR and PBSA pipeline and reinforce our reputation with institutional investors as the UK's leading residential for rent developer. This, together with the ongoing re-focusing of our homes business into the affordable housing market, provides a robust platform for sustained earnings growth."
Capital Markets Day
A virtual Capital Markets Day will be held today between 2pm and 4pm. CEO Richard Simpson will be joined by newly appointed Chairman Alan Giddins, incoming CFO Sarah Sergeant and members of the Executive Management team to provide an update on the Group's markets, its sustainability strategy and the ongoing re-focusing of its existing residential division on the affordable homes market.
A recording of the event will be available via the Group's investor relations website: www.watkinjonesplc.com.
To coincide with the Capital Markets Day, the Group has today updated its sustainability strategy and targets across the three themes of people, places and planet. For more details, see www.watkinjonesplc.com/ESG.
- Ends -
For further information:
Watkin Jones plc |
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Richard Simpson, Chief Executive Officer | Tel: +44 (0) 20 3617 4453 | |
Phil Byrom, Chief Financial Officer | www.watkinjonesplc.com | |
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Peel Hunt LLP (Nominated Adviser & Joint Corporate Broker) |
Tel: +44 (0) 20 7418 8900 | |
Mike Bell / Ed Allsopp | www.peelhunt.com | |
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Jefferies Hoare Govett (Joint Corporate Broker) |
Tel: +44 (0) 20 7029 8000 | |
Max Jones / Will Soutar
| www.jefferies.com | |
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Media enquiries:
Buchanan |
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Henry Harrison-Topham / Steph Whitmore | Tel: +44 (0) 20 7466 5000 |
watkinjones@buchanan.uk.com | www.buchanan.uk.com |
Notes to Editors
Watkin Jones is the UK's leading developer and manager of residential for rent, with a focus on the build to rent and student accommodation sectors. The Group has strong relationships with institutional investors, and a reputation for successful, on-time-delivery of high quality developments. Since 1999, Watkin Jones has delivered 46,000 student beds across 136 sites, making it a key player and leader in the UK purpose-built student accommodation market, and is increasingly expanding its operations into the build to rent sector. In addition, Fresh, the Group's specialist accommodation management business, manages over 22,000 student beds and build to rent apartments on behalf of its institutional clients. Watkin Jones has also been responsible for over 80 residential developments, ranging from starter homes to executive housing and apartments. The Group is currently piloting an opportunity to re-position its homes business as a developer of affordable homes.
The Group's competitive advantage lies in its experienced management team and capital-light business model, which enables it to offer an end-to-end solution for investors, delivered entirely in-house with minimal reliance on third parties, across the entire life cycle of an asset.
Watkin Jones was admitted to trading on AIM in March 2016 with the ticker WJG.L. For additional information please visit www.watkinjonesplc.com