Last checked at 13 Apr 2022 07:00
For immediate release | 13 April 2022 |
Watkin Jones plc
(the 'Group')
H1-2022 Trading Update
Robust pipeline underpins confidence in full year delivery
The Group provides the following trading update for the half year ended 31 March 2022 (the 'period' or 'H1-2022').
· Sustained strong delivery across in-build schemes and pipeline development gives the Board continued confidence in the Group's full year performance.
· As anticipated, H1-2022 revenue was ahead of the prior year with gross profit and operating profit expected to be below last year, reflecting specific FY22 factors:
- A higher proportion of land sales in the period which as usual generate a lower margin than the ensuing development activity; The Group completed three land sales in the period with revenue of £55m compared to nil in H1 FY21.
- The planned portfolio sale of several PBSA assets which is under offer and expected to close in H2.
· The business continues to proactively manage inflationary price rises experienced in the period for both asset values and construction costs. This has involved a number of 'open book' discussions with purchasers during the sales process. Whilst this has in certain cases lengthened transaction timeframes, to date we have been able to successfully maintain our margins.
· The business has seen a rising level of investor demand and liquidity for residential for rent assets and the Group has another significant PBSA asset currently under offer for sale, in addition to those in the portfolio referred to above. There are a number of further assets at earlier stages of marketing and which are generating strong interest.
· Secured development pipeline of c. £1.8bn (H1-2021: £1.4bn).
· Good liquidity with gross cash of c. £45m (H1-2021: £80m) and net cash of c. £27m (H1-2021: £31m) at the half year end.
· Further to the position set out at the time of the full year results in January 2022, the Group continues to await the publication of the Government's detailed plans regarding additional initiatives relating to historic fire safety issues. We believe that residential leaseholders should not bear the cost of cladding and critical fire safety defect remediation and will update investors once Government proposals have been published and fully evaluated.
Richard Simpson, Chief Executive Officer of Watkin Jones, said: "We have continued to build on the positive momentum from the second half of last year. We are experiencing very strong investor demand across the markets in which we operate and are well progressed with a number of significant forward sales. This, together with our current momentum, gives confidence in delivery of our full year expectations."
Notice of Interim Results
The Group's Interim Results will be announced on Tuesday 17 May 2022. There will be an in-person presentation for analysts at 09.30am on the day of the announcement, hosted by CEO Richard Simpson and CFO Sarah Sergeant. Please contact Buchanan for further details.
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For further information:
Watkin Jones plc | ||
Richard Simpson, Chief Executive Officer | Tel: +44 (0) 20 3617 4453 | |
Sarah Sergeant, Chief Financial Officer | www.watkinjonesplc.com | |
Peel Hunt LLP (Nominated Adviser & Joint Corporate Broker) |
Tel: +44 (0) 20 7418 8900 | |
Mike Bell / Ed Allsopp | www.peelhunt.com | |
Jefferies Hoare Govett (Joint Corporate Broker) |
Tel: +44 (0) 20 7029 8000 | |
Max Jones / James Umbers
| www.jefferies.com | |
Media enquiries:
Buchanan | |
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, student accommodation and affordable housing 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'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