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RNS Number : 3676V
Watkin Jones plc
14 April 2021
For immediate release 14 April 2021
Watkin Jones plc
('Watkin Jones' or the 'Group')
H1-2021 Trading Update
'Maintaining momentum as the economy reopens'
Watkin Jones plc (AIM:WJG), the UK's leading developer and
manager of residential for rent, with a focus on the build to rent
('BtR') and purpose built student accommodation ('PBSA') sectors,
provides the following trading update for the half year ended 31
March 2021 (the 'period' or 'H1-2021').
Richard Simpson, Chief Executive Officer of Watkin Jones,
said:
"The rapid roll-out of the COVID-19 vaccine in the UK and
decline in infections is beginning to restore some normality and
confidence to the UK economy and our market sectors. We've
maintained momentum from the second half of last year, making
further good progress in securing new forward sales, adding to our
development pipeline and with our construction activities all on
track.
"We anticipate our profit for the first half of the year to be
in line with our expectations and slightly below last year, which
was before the onset of the disruption caused by the pandemic.
"The fundamentals supporting the markets for high quality build
to rent and student accommodation assets remain strong and with the
continued progress we have made in the first half of the year,
gives us confidence in our future trading."
H1-2021 performance
-- Adjusted EBIT anticipated to be in line with our expectations
and slightly below H1-2020, which was before the COVID-19
disruption to our operations and the markets in which we
operate.
-- Good half year liquidity position, with gross cash of
c.GBP88.0 million (H1-2020: GBP72.4 million) and net cash of
c.GBP31.0 million (H1-2020: GBP37.5 million), after deducting site
specific loans.
-- Construction activities on track across all BtR and PBSA developments.
-- Revenues from Fresh property management business resilient,
despite short term disruption across the higher education sector;
income supported by new mandates won since the start of the year
for 2,619 PBSA beds.
-- Sales levels within the Homes business robust.
-- Cladding remedial works relating to fire safety progressing
in line with previous guidance; increased clarity in future
direction of government policy supportive of our position.
-- Affordable housing pilot progressing to plan.
Continued momentum in securing forward sales
-- Contracts exchanged subsequent to the period end for the sale
of our 462 bed PBSA development in Leicester to Deutsche Finance
International ('DFI') for a value of GBP35.6 million, payable on
completion of the asset. The development is scheduled for
completion in FY-2021 ahead of the 2021/22 academic year and is to
be managed by Fresh. This transaction represents DFI's second
acquisition of PBSA in the UK and their first with Watkin
Jones.
-- Legals progressing on the forward sale of our BtR
developments in Leicester, Hove and Lewisham (London) and terms
agreed for the forward sale of a 295 bed PBSA scheme in Edinburgh,
subject to planning.
-- Total forward sales of four PBSA developments (1,371 beds) since the start of the year.
-- Legals progressing for the forward sale of 159 homes on our
affordable housing pilot site in Crewe.
Development pipeline further enhanced since our last update in
January
-- New PBSA site for 350 beds secured in Swansea.
-- Secured development pipeline currently comprises
approximately 4,500 BtR apartments and 8,250 PBSA beds (H1-2020:
2,660 BtR apartments and 7,200 PBSA beds), with a future revenue
value of c.GBP1.4 billion, excluding the revenue delivered in the
period (H1-2020: GBP1.0 billion).
-- Legal negotiations progressing on attractive new sites to be
acquired across all residential for rent segments.
Board succession
As part of our orderly Board succession planning, several
changes are being planned for the future. Having led the Board
successfully since the Group's IPO in 2016, Grenville Turner,
Non-Executive Chairman, is intending to retire at the end of this
year and a search for his successor has commenced. In addition,
Phil Byrom, Chief Financial Officer, is planning to retire next
year, after nearly 20 years' service in both the private family
company and through its transition to being publicly listed. The
recruitment process for his successor has also been started.
Notice of Interim Results
The Group's Interim Results will be announced on Tuesday, 18 May
2021. There will be a conference call for analysts at 09.30am on
the day of the announcement, hosted by CEO Richard Simpson and CFO
Phil Byrom. Please contact Buchanan at watkinjones@buchanan.uk.com
if you would like to receive the dial in details.
- Ends -
For further information:
Watkin Jones plc
Richard Simpson, Chief Executive Officer Tel: +44 (0) 1248 362 516
Phil Byrom, 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 / Will Soutar www.jefferies.com
Media enquiries:
Buchanan
Henry Harrison-Topham / Richard Oldworth
Jamie Hooper / Steph Watson 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 43,000 student beds across 130 sites, making it
a key player and leader in the UK purpose-built student
accommodation market. In addition, Fresh, the Group's specialist
accommodation management business, manages over 20,000 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 increasingly expanding its
operations into the build to rent sector.
The Group's competitive advantage lies in its experienced
management team and 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
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