REG - Watkin Jones plc - H1-2022 Trading Update

Watkin JonesAnnouncement

13/04/2022 07:00

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RNS Number : 1873I  Watkin Jones plc  13 April 2022

 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.

 

- Ends -

 

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 (http://www.watkinjonesplc.com/)

 Peel Hunt LLP (Nominated Adviser & Joint Corporate Broker)                  Tel: +44 (0) 20 7418 8900
 Mike Bell / Ed Allsopp                                                      www.peelhunt.com (http://www.peelhunt.com/)

 Jefferies Hoare Govett (Joint Corporate Broker)                             Tel: +44 (0) 20 7029 8000
 Max Jones / James Umbers                                                    www.jefferies.com (http://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
(http://www.watkinjonesplc.com/)

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