TIDMWJG
RNS Number : 9918Q
Watkin Jones plc
02 November 2021
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.
-- GBP430 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.
-- GBP125 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. GBP450 million.
-- The above includes new forward sales achieved since our 6
September trading update, with a total revenue value to WJ of c.
GBP227 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 GBP1.75 billion:
BtR PBSA
(apartments) (beds)
September 2021 update 3,870 6,750
New sites secured:
Leatherhead (with the benefit 214 -
of planning)
Colchester (development agreement) - 286
---------------- ---------------
4,084 7,036
Design changes (72) 106
---------------- ---------------
Current 4,012 7,142
---------------- ---------------
Future revenue value GBP0.95 billion GBP0.8 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
Richard Simpson, Chief Executive Officer Tel: +44 (0) 20 3617 4453
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 / 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
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