Watkin Jones plc Trading Update (4346G)
July 19 2023 - 1:00AM
UK Regulatory
TIDMWJG
RNS Number : 4346G
Watkin Jones plc
19 July 2023
For immediate release 19 July 2023
Watkin Jones plc
('Watkin Jones' or the 'Group')
Trading Update
Watkin Jones today provides the following trading update for the
year ending 30 September 2023.
At the time of the interim results on 23 May, we announced the
forward sale of our PBSA scheme in Bristol and noted that we had
five other forward sales targeted for completion in FY23, two of
which were under offer. Since then, we have completed the announced
forward sale of Titanic Quarter in Belfast. In the period since the
interim results, market conditions have become more challenging. In
particular, the recent increases in interest rates and prevailing
economic uncertainty have impacted negatively on market liquidity.
As a result, there is now a greater degree of risk over these
transactions completing by the year end.
We have also reviewed our balance sheet against this more
challenging macro-economic backdrop and increased cost of funding.
We continue to explore the sale of a limited number of non-core
assets on our balance sheet and consider it prudent to reassess the
carrying value of certain assets with the expectation that this
will result in an impairment charge of c. GBP10m.
Our schemes in build continue to progress in line with
expectations. In the event that we do not complete any new forward
sales in the balance of the year, and taking into account the
impairment charge referenced above, we would not expect to
materially improve on the Underlying PBIT recorded in H1 of GBP2m.
Our current expectation is that these challenging market conditions
will persist into FY24, and against this more cautious backdrop,
our FY24 PBIT is likely to be in the range of GBP15m to GBP20m.
In line with recent announcements from other developers, we
expect to increase our exceptional provision for remedial works for
legacy properties by an additional GBP30m to GBP35m. This
represents our current best estimate, primarily reflecting our
intention to sign the Government's Responsible Actors Scheme, and
our obligation to reimburse funds under the scheme, as well as an
update to cost estimates on remedial works for properties provided
for in FY22. The cash cost of this is expected to be spread over
the next five years. We are reviewing details of the Welsh
Developers Pact and await further information on the scope of the
Scottish Safer Buildings Accord to understand any implications for
the Group.
Watkin Jones remains a UK market leader in residential for rent
development, focused on sectors with a very attractive long term
growth outlook. The strength of our balance sheet and agility of
the business allow us to remain proactive in the market. At 30 June
2023 our gross and net cash position was GBP68m and GBP36m
respectively.
- Ends -
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014 as it
forms part of UK Domestic Law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR")
For further information:
Watkin Jones plc
Alex Pease, Interim 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
James Umbers/David Sheehan / Paul Bundred www.jefferies.com
Media enquiries:
Buchanan
Henry Harrison-Topham / Jamie Hooper 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 48,000 student beds across 143
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 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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