FY23 Trading Update
Watkin Jones provides the following trading update for the year ended 30 September 2023 (the ‘year’ or ‘FY23’), ahead of the publication of the Group’s final results in January 2024.
FY23 trading
The Group was successful in achieving its operational objectives for the second half of the year with practical completion on four schemes in the final quarter and the sale of its three non-core PRS operational assets.
In our 19 July 2023 trading update (the ‘July Trading Update’) we indicated that we did not expect to materially improve on the underlying PBIT recorded in H1 of £2 million. Since the trading update the Group has incurred certain additional costs, including acceleration costs to ensure successful completion on two schemes. These costs are not expected to carry forward into the current year. We now expect FY23 revenue to exceed £400 million and underlying PBIT to be at approximately break-even.
Cash performance was strong in the final part of the year, with gross and net cash of c. £72 million and c. £43 million, respectively, at 30 September 2023. This increased cash balance includes the previously announced inflow of c. £9 million from the sale of the three non-core PRS operational assets.
In the period since the July Trading Update, we have had significant focus on operational and cost efficiencies within the business. This has included reviewing the overhead cost base and implementing a number of cost actions which will generate annualised savings of over £2 million in FY24.
The Group’s position on the exceptional provision for remedial works for legacy properties remains unchanged from the July Trading Update.
FY24 Outlook
Whilst the current challenging market conditions are set to continue into the start of FY24, the Group’s level of secured revenue for FY24 is c. £330 million. The Group is making progress with its assets for forward sale in the market and remains active, but highly selective, in the land market. There is no change to the FY24 guidance provided in the July Trading Update.
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