REG - Watkin Jones plc - Half Year Results
Today 07:00
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RNS Number : 7787F Watkin Jones plc 27 May 2026
27 May 2026
Watkin Jones plc
(the 'Group')
HY Results for the six months ended 31 March 2026
Operational progress & proactive strategy for continued diversification
The Group announces its interim results for the half year ended 31 March 2026
('HY26' or 'the period').
Adjusted Results ((1)) Statutory Results
HY26 HY25 HY26 HY25
Revenue £100.2m £129.2m £100.2m £129.2m
Gross profit £9.3m £14.4m £9.3m £14.4m
Operating profit £0.4m £0.4m £0.4m £0.4m
Profit / (loss) before tax £nil £0.2m (£0.9m) (£0.9m)
Basic earnings / (loss) per share 0.01p 0.05p (0.35p) (0.27p)
Adjusted net cash((2)) £61.3m £73.4m
(1) For HY26 Adjusted Profit before tax and Adjusted Earnings per share
are calculated before the impact of an exceptional finance cost of £0.9
million (HY25: £1.1 million) for the unwinding of the discount rate on the
Building Safety provision.
(2) Adjusted net cash is stated after deducting interest bearing loans and
borrowings, but before deducting IFRS 16 operating lease liabilities of £31.1
million as at 31 March 2026 (31 March 2025: £37.4 million).
HY26 Highlights
· Revenue of £100.2 million delivered primarily from in-build schemes:
- Two new transactions during the period - a further PBSA scheme in
Bristol and a scheme to deliver a hotel on a brownfield site in Wimbledon
· Operating profit of £0.4 million:
- Strong construction delivery, at margins in line with previous
guidance, including the initial contribution from the sale of our Bristol
scheme supported by our diversified routes to market.
- Continued effective cost management despite inflationary pressures.
· Further operational progress, despite the challenging backdrop:
- Achieved planning on c.800 new living units in the period
- Growth of 20% in Development Partnership and Refresh pipeline
· Maintained focus on cash management:
- Period end gross and adjusted net cash balances of £67.1 million and
£61.3 million, respectively.
· Further progress on building safety:
- Successful achievement of Gateway 2 at four sites during the period,
benefiting from early engagement with the Building Safety Regulator
- Reduced net provision of £38.0 million
Outlook
· Whilst we monitor the evolving geopolitical and economic backdrop and
the consequential impacts on both market confidence and liquidity, the Group
continues to focus on the factors within our control:
- successfully delivering our in-build projects
- carefully managing our costs and cash, in particular with earlier
procurement of selected sub-contract packages and forward buying of materials
to mitigate inflationary pressures
- accelerating the move into Development Partnerships and Refresh where
we are refocusing and optimising utilisation of the Group's resources and
capitalising on the business' end-to-end capabilities
· Total secured pipeline of c.£1.3 billion, including c.£300 million
of contractually secure forward sold revenue as at 31 March 2026, of which
c.£90 million is for delivery in the second half of this year.
· Several schemes are currently being marketed which have the potential
to underpin delivery of an improved second half performance:
- Mix of forward fund, Development Partnership and Refresh schemes
- Number and type of transactions executed in H2, will have significant
bearing on FY outturn
· Potential for the business over medium term remains attractive, as we
exploit our expertise in the residential sector and also diversify into
adjacent sectors and new funding structures.
Alex Pease, Chief Executive Officer of Watkin Jones, said:
"We have achieved a resilient performance in the first half, underpinned by
strong operational delivery and a proactive approach to cost and cash
management. Our integrated platform continues to be a key differentiator,
enabling us to identify incremental opportunities to deploy capabilities and
diversify revenues across Development Partnerships, Refresh and adjacent
sectors.
While market conditions remain challenging and continue to impact the pace of
recovery, the long-term fundamentals of our end markets remain attractive, and
our flexibility, strong pipeline and capital-light model positions us well to
navigate the near-term market conditions and create value for our stakeholders
in the future."
Analyst meeting
There will be a pre-recorded audiocast of the HY26 Results presentation
available to view on the Group's website (www.watkinjonesplc.com
(http://www.watkinjonesplc.com) ) from 7am (BST) today. At 9.30am (BST),
there will be a live 30-minute Q&A webcast for sell-side analysts, hosted
by Alex Pease (CEO) and Simon Jones (CFO). Those analysts wishing to join
and receive dial in details should register their interest via MHP
(mailto:watkinjones@mhpgroup.com?subject=I%20would%20like%20details%20of%20WJG%20analyst%20webcast%20please)
.
For further information:
Watkin Jones plc
Alex Pease, Chief Executive Officer Tel: +44 (0) 20 3617 4453
Simon Jones, 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/)
Singer Capital Markets (Joint Corporate Broker) Tel: +44 (0) 20 7496 3000
Sara Hale / Graham Hertrich / Amber Higgs www.singercm.com
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Media enquiries:
MHP Group
Reg Hoare / Rachel Farrington / Catherine Chapman Tel: +44 (0) 7711 191518
watkinjones@mhpgroup.com (mailto:watkinjones@mhpgroup.com) www.mhpgroup.com
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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 over 51,000 student
beds across 150 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, where it has delivered 3,400
apartments across 19 schemes to date. In addition, Fresh, the Group's
specialist accommodation management business, manages significantly more than
21,000 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) .
Review of Performance
Results for the six months to 31 March 2026
Revenues for the period were £100.2 million (HY25: £129.2 million).
Operationally the Group's businesses have continued to perform well, with our
developments on site progressing in line with expectations. The decrease in
revenues reflects the sustained lower level of transactional activity.
Development Partnerships contributed £43.8m (HY25: £32.3m) of revenue in the
period.
Gross profit was £9.3 million (HY25: £14.4 million), with gross margin at
9.3% slightly behind the prior year (HY25: 11.1%) due to change in mix of
schemes on site and transaction structures.
Operating profit for the period on both a statutory and adjusted basis was
£0.4 million (HY25: £0.4 million), with the sale of our Bristol development,
executed as a disposal of a subsidiary rather than a traditional land sale,
offsetting the reduction in revenues.
Net finance costs for the period were £1.3 million (HY25: £1.3 million).
Finance costs include £0.6 million (HY25: £0.8 million) in respect of the
interest on leases, and a discount rate unwind of £0.9 million (HY25: £1.1
million).
Loss before tax for the period was £0.9 million (HY25: loss before tax of
£0.9 million). Our adjusted result before tax for the period, which
excludes the exceptional finance costs of £0.9 million relating to the
discount rate unwind, was at breakeven (HY25: £0.2 million). Adjusted basic
earnings per share for the period were 0.01 pence, compared to 0.05 pence for
HY25.
Segmental review
Build to Rent ('BTR')
Revenues from BTR decreased by 42.4% in the period to £52.0 million (HY25:
£90.3 million), reflecting the completion of three schemes in FY25.
Revenues were derived from the build-out of our forward sold developments,
which are progressing well and on track for their respective completions.
Gross profit for the period was £6.5 million (HY25: £7.4 million), with the
gross margin improved from the prior year to 12.5% (HY25: 8.2%), reflecting
the margin mix of live schemes.
Student accommodation ('PBSA')
Revenues from PBSA were higher than last year at £33.2 million (HY25: £25.6
million) reflecting our Glasgow and Bristol developments, recently sold into
our joint venture with Maslow Capital, having commenced on site, supported by
further strong build progress from our other live schemes.
PBSA gross profit for the period was £0.9 million (HY25: £3.9 million) with
operating margin for the period at 17.4% (HY25: 15.2%) including the sale of
our Bristol development.
Refresh
Refresh, our asset refurbishment division, continues to build its reputation
in the market, with an increased total pipeline of c.£135 million.
Accommodation management (Fresh)
Fresh achieved revenues of £4.6 million (HY25: £4.2 million), with units
under management increasing to over 21,000. Eight new schemes were being
mobilised at the period end, which will add a further c.1,700 beds in the
second half.
Gross profit increased to £2.6 million (HY25: £2.3 million), with the modest
improvement in margin of 56.5% (HY25: 55.1%) reflecting strong cost control in
light of inflationary increases across operating expenses.
Academic year 2026/27 leasing is tracking in line with prior year. However,
outturn occupational performance across PBSA markets remains uncertain driven
by reductions in international student recruitment and affordability. Our
expectation is that demand will remain focussed on higher ranked higher
education institutions, and locations which align with these institutions will
outperform.
Single family homes
The affordable-led Single family homes business continued to make good
progress at our development partnership site in St Helens. Revenue increased
to £7.9 million benefitting from a full year on site at this scheme (HY25:
£4.8 million).
The gross profit achieved by the division increased as a result of higher
revenues to £0.5 million (HY25: £0.3 million), at consistent margins of 6.3%
(HY25: 6.3%).
Balance sheet and liquidity
Our financial position and liquidity remain strong. We had a gross cash
balance at 31 March 2026 of £67.1 million (31 March 2025: £86.8 million),
whilst net cash stood at £61.3 million (31 March 2025: £73.4 million),
before deducting IFRS 16 lease liabilities.
The Group had undrawn headroom of £43.9 million on its revolving credit
facility ('RCF') with HSBC at 31 March 2026, giving total cash and available
facilities of £111.0 million, with a further optional £10.0 million
accordion facility.
Our strong liquidity position is the result of effective working capital
management and collection of retentions and bullet payments on completed
schemes, offset by the impact of our normal annual cash profile, which sees a
higher utilisation of cash in the first half of the year. Our inventory
and work in progress balance increased by a net £4.8 million, to £91.7
million since 30 September 2025 as a result of enabling works we have carried
out on sites we have in the market.
Contract assets and receivables at 31 March 2026 stood at £27.8 million and
£28.9 million and had decreased £1.3 million and £12.1 million
respectively from the position at 30 September 2025. The contract assets
relate primarily to the final payments to be received on completion of the
forward sold developments in build, increasing as developments progress.
Contract and trade liabilities amounted to £80.9 million at 31 March 2026 and
had decreased by £6.3 million since the FY25 year-end position.
Building Safety
We continue to focus on the delivery of our building safety rectification
obligations and have completed works on two buildings in the period with cash
spend in line with expectations. As previously reported, there remains
significant uncertainty in this area across the sector and, as for many other
participants in our industry, assets in scope and the scope and cost of works
continue to evolve.
We will continue to monitor this as discussions with building owners and
building investigations continue. We have utilised £9.4 million net of
contributions received from our Building Safety provision in HY26, with the
discount on the provision also being unwound by £0.9 million, resulting in a
net provision at 31 March 2026 of £38.0 million.
ESG
Following the successful culmination of our Future Foundations Strategy in
FY24/25, we launched a new set of objectives this year. This renewed strategy
introduces a sharper focus on areas such as Social Value and uplifts some of
our previous targets around Considerate Constructor and BREEAM.
All core sites remain on target to deliver our uplifted targets in relation to
BREEAM (Excellent) and Considerate Constructors (Excellent), and our hybrid
plant strategy continues to deliver significant carbon savings.
Our Fresh colleagues have recently delivered a record NPS of +38 -
significantly in advance of new target of +30 - also receiving platinum global
student living index accreditation.
Our work with Mind continues, with fund raising efforts from our recent
Supplier Conference demonstrating the alignment and support of our wider
supply chain for our ESG objectives.
Dividend
The Board is continuing to prioritise the maintenance of financial flexibility
during this period of market disruption and consequently is not declaring an
interim dividend; the Board will keep this approach under review.
Outlook
We continue to focus on the factors within our control such as managing the
delivery of our in-build schemes, controlling costs and cash and broadening
our revenue base whilst mindful of the uncertain geo-political backdrop and
impact on market sentiment.
During the second half, these will continue to be our priorities together with
increased focus on forward procurement of key sub-contract packages and
forward buying of materials to help mitigate the expected inflationary
pressures as well as focusing on the successful divestment of the schemes that
we have in the market. Whilst the market for these assets remains challenging,
our schemes are attracting interest with a number of further forward sales
from this pipeline required in H2 26 to enable delivery of full year
performance in line with current market expectations.
Alex Pease
Chief Executive Officer
27 May 2026
Consolidated Statement of Comprehensive Income
for the six month period ended 31 March 2026 (unaudited)
6 months to 31 March 2026 6 months to 31 March 2025
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Revenue 5 100,171 - 100,171 129,176 - 129,176
Cost of sales (90,835) - (90,835) (114,765) - (114,765)
Gross profit 9,336 - 9,336 14,411 - 14,411
Administrative expenses 6 (13,822) - (13,822) (13,989) - (13,989)
Profit on disposal of subsidiary 4,886 - 4,886 - - -
Operating profit 400 - 400 422 - 422
Finance income 598 - 598 955 - 955
Finance costs (985) (901) (1,886) (1,205) (1,090) (2,295)
Profit/(loss) before tax 13 (901) (888) 172 (1,090) (918)
Income tax (expense)/credit 8 (3) 3 - (43) 272 229
Profit/(loss) for the year attributable to ordinary equity holders of the 10 (898) (888) 129 (818) (689)
parent
Other comprehensive income
That will not be reclassified to profit or loss in subsequent periods:
Net gain/(loss) on equity instruments designated at fair value through other 15 - 15 9 - 9
comprehensive income, net of tax
Total comprehensive income/(loss) for the year attributable to ordinary equity 25 (898) (873) 138 (818) (680)
holders of the parent
Pence Pence Pence Pence Pence Pence
Earnings per share for the year attributable to ordinary equity holders of the
parent
Basic earnings/(loss) per share 9 0.006 (0.352) (0.346) 0.050 (0.318) (0.268)
Diluted earnings/(loss) per share 9 0.006 (0.352) (0.346) 0.050 (0.318) (0.268)
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2025
Year ended 30 September 2025
Before
exceptional Exceptional
items items Total
Notes £'000 £'000 £'000
Continuing operations
Revenue 5 279,837 - 279,837
Cost of sales (253,345) (7,110) (260,455)
Gross profit 26,492 (7,110) 19,382
Administrative expenses 6 (28,306) (5,000) (33,306)
Profit on disposal of subsidiary 8,163 - 8,163
Operating profit/(loss) 6,349 (12,110) (5,761)
Share of loss in joint ventures - - -
Finance income 1,359 - 1,359
Finance costs (2,097) (2,181) (4,278)
Profit/(loss) before tax 5,611 (14,291) (8,680)
Income tax credit 274 - 274
Profit/(loss) for the year attributable to ordinary equity holders of the 5,885 (14,291) (8,406)
parent
Other comprehensive income
That will not be reclassified to profit or loss in subsequent periods:
Net gain on equity instruments designated at fair value through other 27 - 27
comprehensive income, net of tax
Total comprehensive income/(loss) for the year attributable to ordinary equity 5,912 (14,291) (8,379)
holders of the parent
Pence Pence Pence
Earnings per share for the year attributable to ordinary equity holders of the
parent
Basic earnings/(loss) per share 2.293 (5.568) (3.275)
Diluted earnings/(loss) per share 2.288 (5.563) (3.275)
Consolidated Statement of Financial Position
as at 31 March 2025 (unaudited)
31 March 31 March 30 September
2026 2025 2025
Notes £'000 £'000 £'000
Non-current assets
Intangible assets 10,212 10,767 10,487
Investment property (leased) 13,463 18,606 15,681
Other right of use assets 4,851 5,136 4,585
Property, plant and equipment 809 1,317 828
Investment in joint ventures 18,754 7,884 14,515
Reimbursement assets 7 7,628 10,774 7,710
Deferred tax asset 15,090 15,319 15,090
Other financial assets 679 875 679
71,486 70,678 69,575
Current assets
Inventory and work in progress 91,691 100,062 86,851
Contract assets 27,796 34,323 29,123
Trade and other receivables 28,858 27,350 41,015
Reimbursement assets 7 2,537 1,099 2,565
Current tax receivables 285 2,523 2,911
Cash and cash equivalents 12 67,064 86,827 80,398
218,231 252,184 242,863
Total assets 289,717 322,862 312,438
Current liabilities
Trade and other payables (73,579) (80,547) (83,169)
Contract liabilities (7,353) (1,900) (4,005)
Lease liabilities (6,801) (7,733) (8,223)
Provisions 7 (15,402) (6,581) (22,286)
(103,135) (96,761) (117,683)
Non-current liabilities
Interest-bearing loans and borrowings (5,757) (13,443) (9,933)
Lease liabilities (23,406) (29,689) (25,408)
Provisions 7 (32,737) (50,399) (34,420)
(61,900) (93,531) (69,761)
Total Liabilities (165,035) (190,292) (187,444)
Net assets 124,682 132,570 124,994
Equity
Share capital 2,568 2,567 2,567
Share premium 84,612 84,612 84,612
Merger reserve (75,383) (75,383) (75,383)
Fair value reserve of financial assets at FVOCI 204 171 189
Share-based payment reserve 2,368 2,440 1,808
Retained earnings 110,313 118,163 111,201
Total Equity 124,682 132,570 124,994
Consolidated Statement of Changes in Equity
for the six month period ended 31 March 2026 (unaudited)
Share Fair value of financial assets at FVOCI Share-based payment reserve Total
Share Premium £'000 £000 Retained £'000
Capital £'000 Merger earnings
£'000 Reserve £'000
£'000
Balance at 30 September 2024 2,567 84,612 (75,383) 162 1,780 118,852 132,590
Profit for the period - - - - - (689) (689)
Share-based payments - - - - 660 - 660
Other comprehensive income - - - 9 - - 9
Balance at 31 March 2025 2,567 84,612 (75,383) 171 2,440 118,163 132,570
- - - - (7,717) (7,717)
Profit for the period -
Share-based payments - - - - (18) - (18)
Other comprehensive income - - - 18 - - 18
Deferred tax credited directly to equity - - - - - 141 141
Recycled reserve for fully vested share-based payment schemes - - - - (614) 614 -
Balance at 30 September 2025 2,567 84,612 (75,383) 189 1,808 111,201 124,994
- - - - - (888) (888)
Loss for the period
Share-based payments - - - - 560 - 560
Issue of shares 1 - - - - - 1
Other comprehensive income - - - 15 - - 15
Balance at 31 March 2026 2,568 84,612 (75,383) 204 2,368 110,313 124,682
Consolidated Statement of Cash Flows
for the six month period ended 31 March 2026 (unaudited)
6 months to 6 months to 12 months to
31 March 31 March 30 September
2026 2025 2025
Notes £'000 £'000 £'000
Cash flows from operating activities
Cash outflow from operations 11 (8,685) (5,868) (13,101)
Interest received 598 644 1,359
Interest paid (889) (1,130) (2,314)
Tax received/(paid) 2,778 - (61)
Net cash outflow from operating activities (6,198) (6,354) (14,117)
Cash flows from investing activities
Acquisition of property, plant and equipment (122) (129) (129)
Proceeds on disposal of property, plant and equipment - - -
Proceeds on disposal of a subsidiary 5,520 - 9,122
Repayment of related party loan following disposal of subsidiary 620 - 6,558
Investment in joint venture interests (4,565) - (6,750)
Net cash (outflow)/inflow from investing activities 1,453 (129) 8,801
Cash flows from financing activities
Payment of principal portion of lease liabilities (4,317) (3,652) (7,807)
Drawdown of RCF - - -
Repayment of bank loans and RCF (4,272) - (3,441)
Net cash outflow from financing activities (8,589) (3,652) (11,248)
Net (decrease)/increase in cash (13,334) (10,135) (16,564)
Cash and cash equivalents at 80,398 96,962 96,962
beginning of the period
Cash and cash equivalents at 67,064 86,827 80,398
end of the period 12
Notes to the consolidated financial information
1. General information
Watkin Jones plc (the 'Company') is a limited company incorporated in the
United Kingdom under the Companies Act 2006 (Registration number 09791105).
The Company is domiciled in the United Kingdom and its registered address is
12 Soho Square, London, W1D 3QF.
The principal activities of the Company and its subsidiaries (collectively the
'Group') are the development and management of multi-occupancy residential
rental properties.
The consolidated interim financial statements of the Group for the six-month
period ended 31 March 2026 comprises the Company and its subsidiaries. The
basis of preparation of the consolidated interim financial statements is set
out in note 2 below.
The financial information for the six months ended 31 March 2026 is
unaudited. It does not constitute statutory financial statements within the
meaning of Section 434 of the Companies Act 2006. The consolidated interim
financial statements should be read in conjunction with the financial
information for the year ended 30 September 25 which has been prepared in
accordance with international accounting standard in conformity with the
requirements of the Companies Act 2006. The report of the auditors on those
financial statements was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under section 498(2) of the
Companies Act 2006.
This report was approved by the directors on 26 May 2026.
2. Basis of preparation
This set of condensed consolidated interim financial statements has been
prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by
the UK. The interim financial statements have been prepared based on the UK
adopted International Financial Reporting Standards "IFRS" that are expected
to exist at the date on which the Group prepares its financial statements for
the year ended 30 September 2026. To the extent that IFRS at 30 September
2026 do not reflect the assumptions made in preparing the interim financial
statements, those financial statements may be subject to change.
The interim financial statements have been prepared on a going concern basis
and under the historical cost convention.
The interim financial statements have been presented in pounds sterling and
all values are rounded to the nearest thousand (£'000), except when otherwise
indicated.
The preparation of financial information in conformity with IFRS requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on management's best knowledge of the
amount, event or actions, actual events may ultimately differ from those
estimates.
The interim financial statements do not include all financial risk information
and disclosures required in the annual financial statements and they should be
read in conjunction with the financial information that is presented in the
Company's audited financial statements for the year ended 30 September 2025.
There has been no significant change in any risk management policies since the
date of the last audited financial statements.
Going concern
At 31 March 2026, the Group had a robust liquidity position, with cash and
available headroom in its banking facilities totalling £111.0 million made up
of cash balances of £67.1 million and RCF headroom of £43.9 million. The RCF
can be used for the acquisition of land and associated development works, and
allows for a further £10.0 million accordion option within the facility.
Good liquidity has been maintained through the period, providing the Group
with a good level of cash and available banking facilities for the year ahead.
Group forecasts have been prepared that have considered the Group's current
financial position and market circumstances. We have prepared a base case
cash flow for the period to 30 June 2027 which is aligned to the Group's
business plan and trading assumptions for that period. Our currently secured
cash flow, derived from our forward sold developments and other contracted
income, net of overheads and tax, results in utilisation over the forecast
period albeit our cash position remains resilient. In addition to the
secured cash flow, the base case forecast assumes a number of new sales which,
if achieved, will improve that liquidity position.
In addition to the base case forecast, we have considered the possibility of
prolonged disruption to the forward sale market given the market turbulence
seen in the UK over recent years. This is our most significant risk as it
would greatly limit our ability to achieve any further disposals. We have
run a reasonable downside scenario to assess the possible impact of the above
risks, such that forward sales and new site acquisitions are delayed by up to
six months. The cash forecast prepared under this scenario illustrates that
adequate liquidity is maintained through the forecast period and the financial
covenants under the RCF would still be met.
The minimum total cash and available facilities balance under this scenario is
£70.4 million (excluding the £10.0 million accordion facility).
We consider the likelihood of events occurring which would exhaust the total
cash and available facilities remaining to be remote. However, should such
events occur, management would be able to implement reductions in
discretionary expenditure and consider the sale of the Group's land sites to
ensure that the Group's liquidity was maintained.
Based on the thorough review and robust downside forecasting undertaken, and
having not identified any material uncertainties that may cast any significant
doubt, the Board is satisfied that the Group will be able to continue to trade
for the period to 30 June 2027 and has therefore adopted the going concern
basis in preparing the financial statements.
Building Safety Provision
The Group holds a provision for building safety remedial works, for which the
legislative and construction background was disclosed in the Group's audited
financial statements for the year ended 30 September 2025.
This is a highly complex area with significant estimates in respect of the
cost of remedial works, the quantum of any legal expenditure associated with
the defence of the Group's position in this regard, and the extent of those
properties within the scope of the applicable government guidance and
legislation, which continues to evolve. All our buildings were signed off by
approved inspectors as compliant with the relevant Building Regulations at the
time of completion.
The amount provided for these works has been estimated by reference to recent
industry experience and external quotes for similar work identified. The
investigation of the works required at many of the buildings is at an early
stage and, therefore, it is possible that these estimates may change over time
or if government legislation and regulation further evolves.
As a number of other housebuilders and developers have done over the last 12
months, we have included an additional amount of contingency within our
provision to reflect further buildings being identified as requiring
remediation, or for unforeseen remediation costs beyond management's current
knowledge. We have also implemented a consistent contingency policy across
the properties where work is yet to start.
We expect this cost to be incurred within the next four financial years, and
the provision has been discounted to its present value accordingly. The
timing of this expenditure will be dependent on the timely engagement by
building owners, revisions to programme under the new BSA Gateways, and the
availability of appropriately qualified subcontractors.
We continue to make progress negotiating contributions from clients to
mitigate our liability in relation to these remedial works. At the balance
sheet date, we have recognised reimbursement assets of £10.2 million (30
September 2025: £10.3 million).
At the period end the Group remained in discussions with a number of property
owners whereby the legal responsibility or confirmation of fire safety
remediation requirements remains uncertain and which, therefore, form part of
the Group's contingent liabilities. As referred to above, the clarification of
whether these liabilities crystallise is dependent on multiple factors which
are expected to be concluded in the next 12 to 24 months.
At the same time, the Group continues to explore opportunities to recover the
costs of remediation through the Group's insurance providers and supply chain.
However, no benefit has been assumed within the provision unless contractual
terms have been established.
We will continue to keep abreast of any changes to legislation and guidance,
recognising that the approach to building safety continues to evolve.
Of the outstanding net provision, £2.2 million is fixed as a result of legal
settlements agreed with building owners. However, for the remaining
liabilities, should the costs associated with these remedial works increase by
10%, the provision required would increase by £3.4 million. Should the
discount rate applied to the calculation reduce by 1%, the provision required
would increase by £0.5 million. Further details of the provision are set
out in note 7.
Remedial works required on any property identified will range in cost. Whilst
liabilities could be higher than recent experience, in the last two years,
following detailed diligence with respect to scope of works, the range of
liabilities has been between a net cost of £nil and c.£2 million, and the
average net cost has been £0.9 million for properties requiring remediation.
3. Accounting policies
The accounting policies used in preparing these interim financial statements
are the same as those set out and used in preparing the Company's audited
financial statements for the year ended 30 September 2025.
4. Segmental reporting
The Group has identified six segments for which it reports under IFRS 8
'Operating segments', as follows:
A Student accommodation - the development of purpose-built student
accommodation;
B Build to rent - the development of build to rent accommodation;
C Single family homes (formerly "Affordable homes") - the
development of affordable residential housing for sale;
D Refresh - the refurbishment, redevelopment and repurposing of
existing accommodation;
E Accommodation management - the management of student
accommodation and build to rent property; and
F Corporate - revenue from the development of commercial property
forming part of mixed-use schemes and other revenue and costs not solely
attributable to any one other operating segment.
Performance is measured by the Board based on gross profit as reported in the
management accounts. Apart from inventory and work in progress, no other
assets or liabilities are analysed into the operating segments.
6 months to 31 March 2026 (unaudited) Student Build to Single family homes Refresh Accommodation Corporate Total
Accommodation rent management
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Segmental revenue 33,249 52,075 7,879 1,911 4,582 475 100,171
Segmental gross profit 888 6,477 484 558 2,631 (1,312) 9,726
Impairment of inventory for aborted pipeline assets - - - - - (390) (390)
Gross profit/(loss) 888 6,477 484 558 2,631 (1,702) 9,336
Profit on disposal of subsidiary 4,886 - - - - - 4,886
Administration expenses - - - - (2,621) (11,201) (13,822)
Finance income - - - - - 598 598
Finance costs - - - - - (985) (985)
Exceptional finance costs - - - - - (901) (901)
Profit/(loss) before tax 5,774 6,477 484 558 10 (14,191) (888)
Taxation - - - - - - -
Profit/(loss) for the period 5,774 6,477 484 558 10 (14,191) (888)
Inventory and WIP 42,136 25,209 21,202 14 - 3,130 91,691
Disposal of subsidiary
During the period ended 31 March 2026 the Group sold its former subsidiary
Malago Road Bristol Limited to a related party, the joint venture controlled
by The Ard Malago Holdings Limited. On disposal the subsidiary had net assets
of £nil, with a profit on disposal recognised of £4,886,000. As part of the
transaction, a related party loan of £620,000 was settled between the Group
and Malago Road Bristol Limited. The subsidiary held no cash or cash
equivalents at the point of disposal.
6 months to 31 March 2025 (unaudited) Student Build to Single family homes Refresh Accommodation Corporate Total
Accommodation rent management
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Segmental revenue 25,605 90,278 4,758 4,343 4,175 17 129,176
Segmental gross profit 3,903 7,351 264 615 2,301 253 14,687
Impairment of inventory for aborted pipeline assets - - - - - (276) (276)
Gross profit 3,903 7,351 264 615 2,301 (23) 14,411
Administration expenses - - - - (2,391) (11,598) (13,989)
Finance income - - - - - 955 955
Finance costs - - - - - (1,205) (1,205)
Exceptional finance costs - - - - - (1,090) (1,090)
Profit/(loss) before tax 3,903 7,351 264 615 (90) (12,961) (918)
Taxation - - - - - 229 229
Profit/(loss) for the period 3,903 7,351 264 615 (90) (12,732) (689)
Inventory and WIP 44,014 31,331 22,831 207 - 1,679 100,062
Year ended Student Build to Single family homes Refresh Accommodation Corporate Total
30 September 2025 Accommodation rent management
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Segmental revenue 67,704 179,967 13,689 9,995 8,371 111 279,837
Segmental gross profit 5,366 16,031 (849) 1,487 4,634 99 26,768
Impairment of inventory for aborted pipeline assets - - - - - (276) (276)
Exceptional impairment of land assets - - - - - (6,100) (6,100)
Exceptional impairment of right-of-use assets (1,010) - - - - - (1,010)
Gross profit 4,356 16,031 (849) 1,487 4,634 (6,277) 19,382
Administration expenses - - - - (4,834) (23,472) (28,306)
Profit on disposal of subsidiary 8,163 - - - - - 8,163
Exceptional administrative expenses - - - - - (5,000) (5,000)
Operating profit 12,519 16,031 (849) 1,487 (200) (34,749) (5,761)
Share of operating loss in joint ventures - - - - - - -
Finance income - - - - - 1,359 1,359
Finance costs - - - - - (2,097) (2,097)
Exceptional finance costs - - - - - (2,181) (2,181)
Profit/(loss) before tax 12,519 16,031 (849) 1,487 (200) (37,668) (8,680)
Taxation - - - - - 274 274
Profit/(loss) for the period 12,519 16,031 (849) 1,487 (200) (37,394) (8,406)
Inventory and WIP 41,023 23,061 20,861 210 - 1,696 86,851
5. Disaggregated revenue information
6 months to 31 March 2026 (unaudited) Student Build to Single family homes Refresh Accommodation Corporate Total
Accommodation rent management
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Type of goods or service
Construction contracts or development agreements 28,510 52,075 7,519 1,911 - - 90,015
Sale of land - - - - - - -
Sale of completed property - - 360 - - 440 800
Rental income 4,739 - - - - 35 4,774
Accommodation management - - - - 4,582 - 4,582
Total revenue from contracts with customers 33,249 52,075 7,879 1,911 4,582 475 100,171
Timing of revenue recognition
Goods transferred at a point in time - - 360 - - 440 800
Services transferred over time 33,249 52,075 7,519 1,911 4,582 35 99,371
Total revenue from contracts with customers 33,249 52,075 7,879 1,911 4,582 475 100,171
6 months to 31 March 2025 (unaudited) Student Build to Single family homes Refresh Accommodation Corporate Total
Accommodation rent management
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Type of goods or service
Construction contracts or development agreements 19,955 90,278 3,748 4,343 - - 118,324
Sale of land - - - - - - -
Sale of completed property - - 1,000 - - - 1,000
Rental income 5,650 - 10 - - 17 5,677
Accommodation management - - - - 4,175 - 4,175
Total revenue from contracts with customers 25,605 90,278 4,758 4,343 4,175 17 129,176
Timing of revenue recognition
Goods transferred at a point in time - - 1,000 - - - 1,000
Services transferred over time 25,605 90,278 3,758 4,343 4,175 17 128,176
Total revenue from contracts with customers 25,605 90,278 4,758 4,343 4,175 17 129,176
Year ended Student Build to Single family homes Refresh Accommodation Corporate Total
30 September 2025 Accommodation rent management
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Type of goods or service
Construction contracts or development agreements 57,357 179,967 11,983 9,995 - - 259,302
Sale of land - - - - - 64 64
Sale of completed property - - 1,695 - - - 1,695
Rental income 10,347 - 11 - - 47 10,405
Accommodation management - - - - 8,371 - 8,371
Total revenue from contracts with customers 67,704 179,967 13,689 9,995 8,371 111 279,837
Timing of revenue recognition
Goods transferred at a point in time - - 1,695 - - 64 1,759
Services transferred over time 67,704 179,967 11,994 9,995 8,371 47 278,078
Total revenue from contracts with customers 67,794 179,967 13,689 9,995 8,371 111 279,837
6. Exceptional costs
6 months to 6 months to 12 months to
31 March 31 March 30 September
2026 2025 2025
£'000 £'000 £'000
Recognised in cost of sales
Impairment of land assets - - 6,100
Impairment of right-of-use asset - - 1,010
Total exceptional items recognised in cost of sales - - 7,110
Recognised in administrative expenses
Building Safety provision - - 5,000
Total exceptional items recognised in administrative expenses - - 5,000
Recognised in finance costs
Unwind of discount rate on Building Safety provision 901 1,090 2,181
Total exceptional items recognised in finance costs 901 1,090 2,181
Total exceptional costs 901 1,090 9,518
No further exceptional administrative expenses related to the Building Safety
provision have been incurred in the period ended 31 March 2026. The
provision made in the prior year has been unwound to its present value,
resulting in finance costs of £901,000 in this period.
7. Provisions
Building Safety provision
Reimbursement
Provision asset Total
£'000 £'000 £'000
At 1 October 2025 56,707 (10,275) 46,432
Arising during year - - -
(Utilised)/received (9,669) 310 (9,359)
Unwind of discount rate 1,101 (200) 901
At 31 March 2026 48,139 (10,165) 37,974
The provision is classified as follows:
Reimbursement
Provision asset Total
At 31 March 2026 £'000 £'000 £'000
Current 15,402 (2,537) 12,865
Non-current 32,737 (7,628) 25,109
Total 48,139 (10,165) 37,974
Reimbursement
Provision asset Total
At 31 March 2025 £'000 £'000 £'000
Current 6,581 (1,099) 5,482
Non-current 50,399 (10,774) 39,625
Total 56,980 (11,873) 45,107
A net provision of £46,432,000 was held at 30 September 2025 for the Group's
anticipated contribution towards the cost of building safety remedial works.
No new net provision has been recognised during the period ended 31 March
2026.
The net provision at 31 March 2026 amounts to £37,974,000, of which
£12,865,000 is expected to be incurred in the next twelve months to 31 March
2027, with £25,109,000 expected to be incurred between 1 April 2027 and 30
September 2029. The provision has been discounted to its present value
accordingly, at a risk-free rate of 4.42% based on UK five-year gilt yields
(2025: 4.15%).
The judgements and estimates surrounding this provision and corresponding
reimbursement assets are set out in note 2.
8. Income taxes
The tax expense for the period has been calculated by applying the expected
effective tax rate for the financial year ending 30 September 2026 of 25.00%
to the profit for the period.
9. Earnings per share
Basic earnings per share ("EPS") amounts are calculated by dividing the net
profit or loss for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares in issue during the
year.
The following table reflects the income and share data used in the basic EPS
computations:
6 months to 6 months to 12 months to
31 March 31 March 30 September
2026 2025 2025
£'000 £'000 £'000
(Loss)/profit for the period attributable to ordinary equity holders of the (888) (689)
parent
(8,406)
901 1,090 14,291
Add back exceptional items for the period
(3) (272) -
Less corporation tax benefit from exceptional items for the period
Adjusted profit for the period attributable to ordinary equity holders of the 10 129 5,885
parent
Number of shares Number of shares Number of shares
Weighted average number of ordinary shares for basic earnings per share 256,682,816 256,653,097
256,653,097
Adjustments for the effects of dilutive potential ordinary shares 1,320,671 395,495
574,738
Weighted average number for diluted earnings per share 258,003,487 257,048,592
257,227,835
Pence Pence Pence
Basic (loss)/earnings per share
Basic (loss)/profit for the period attributable to ordinary equity holders of (0.346) (0.268) (3.275)
the parent
Adjusted basic earnings/(loss) per share (excluding exceptional items after
tax)
Adjusted profit/(loss) for the period attributable to ordinary equity holders 0.006 0.050 2.293
of the parent
Diluted (loss)/earnings per share
Basic (loss)/profit for the period attributable to diluted equity holders of (0.346) (0.268) (3.275)
the parent
Adjusted diluted earnings/(loss) per share (excluding exceptional items after
tax)
Adjusted profit/(loss) for the period attributable to diluted equity holders 0.006 0.050 2.288
of the parent
10. Dividends
No interim dividend is proposed for the period ended 31 March 2026 (31 March
2025: nil pence per ordinary share). As such, no liability (31 March 2025:
liability of £nil) has been recognised at that date. At 31 March 2026, the
Company had distributable reserves available of £42,257,000 (31 March 2025:
£41,643,000).
11. Reconciliation of profit before tax to net cash flow from
operating activities
6 months to 6 months to 12 months to
31 March 31 March 30 September
2026 2025 2025
£'000 £'000 £'000
(Loss)/profit before tax (888) (918) (8,680)
Depreciation of leased investment properties and right-of-use assets 2,857 2,962 5,892
Impairment of right-of-use assets - - 1,010
Depreciation of plant and equipment 142 212 691
Amortisation of intangible assets 276 280 559
Profit of disposal of subsidiary (4,886) - (8,163)
Loss on sale of plant and equipment - - 11
Finance income (598) (955) (1,359)
Finance costs 1,886 2,295 4,278
(Increase)/decrease in inventory and work in progress (4,840) (5,797) 856
Decrease in contract assets 1,327 2,214 7,415
Decrease/(increase) in trade and other receivables 11,537 3,841 (9,823)
Increase/(decrease) in contract liabilities 3,348 (1,351) 753
Decrease/(increase) in reimbursement assets 310 (4,083) (2,312)
Decrease in trade and other payables (10,047) (5,312) (3,418)
(Decrease)/increase in provisions (9,669) 84 (1,453)
Increase in share-based payment reserve 560 660 642
Net cash (outflow)/inflow from operating activities (8,685) (5,868) (13,101)
12. Analysis of net cash/(debt)
31 March 31 March 30 September
2026 2025 2025
£'000 £'000 £'000
Cash at bank and in hand 67,064 86,827 80,398
Bank loans (5,757) (13,443) (9,933)
Net cash before deducting lease liabilities 61,307 73,384 70,465
Lease liabilities (30,207) (37,422) (33,631)
Net cash/(debt) 31,100 35,962 36,834
- Ends -
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