| 21 May 2024 |
Watkin Jones plc
(the ‘Group’)
HY Results for the six months ended 31 March 2024
Continued operational progress, positioning for market recovery
The Group announces its interim results for the half year ended 31 March 2024 (‘HY24’ or ‘the period’).
| Adjusted Results (1), (2) | Statutory Results | |||||
| HY24 | HY23 | Change (%) | HY24 | HY23 | Change (%) | |
| Revenue | £175.1m | £153.9m | 13.8% | £175.1m | £153.9m | 13.8% |
| Gross profit | £18.4m | £16.1m | 14.3% | £18.4m | £16.1m | 14.3% |
| Operating profit | £4.0m | £1.8m | 122.2% | £4.0m | £0.7m | 471.4% |
| Profit / (loss) before tax | £3.4m | £0.3m | £2.1m | (£0.8)m | ||
| Basic earnings per share | 0.99p | 0.11p | 0.62p | (0.23)p | ||
| Dividend per share | – | 1.4p | – | 1.4p | ||
| Adjusted net cash(3) | £44.0m | £45.3m | ||||
(1) For HY24 Adjusted Profit before tax and Adjusted Earnings per share are calculated before the impact of an exceptional finance cost of £1.3 million for the unwinding of the discount rate on the Building Safety provision.
(2) For HY23 Adjusted Operating Profit, Adjusted Profit before tax and Adjusted Earnings per share are calculated before the impact of an exceptional charge of £1.1 million for people restructuring costs.
(3) Adjusted net cash is stated after deducting interest bearing loans and borrowings, but before deducting IFRS 16 operating lease liabilities of £44.7 million at 31 March 2024 (31 March 2023: £47.5 million).
HY24 Highlights
· Revenue of £175.1 million delivered predominantly from our previously sold developments on site, alongside one forward sale completed in March 2024
· Adjusted operating profit improvement from £1.8 million to £4.0 million, reflecting:
– Gross margins in line with guidance
– Benefit of cost saving actions implemented in FY23
· Continued focus on cash generation resulted in period end gross and net cash balances of £67.1 million and £44.0 million, respectively
· Secured two new PBSA development sites, subject to planning
· Planning submitted for a further c.3,000 PBSA beds across four schemes
· Completed building safety rectification works on three buildings in the period, with cash spend in line with expectations. Group provision unchanged
· Continuing the approach adopted at the FY23 year end, the Board is prioritising 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
· c.£400 million of contractually secure forward sold revenue as at 31 March 2024, of which c. £150 million is for delivery in the second half of the year. Total secured pipeline of £1.4 billion
· Current development schemes on track, supported by continuing moderation in build cost inflation
· Targeting further forward sales in FY24: one scheme in legals and other schemes being actively marketed
· Encouraging initial progress with Refresh opportunities: two smaller projects signed to date, with an active pipeline being pursued
· Investment market gradually showing signs of recovery as economic sentiment improves, albeit, a slower than expected reduction in interest rates has potential to impact pace of recovery
· We expect our FY24 Adjusted Operating Profit to be at least £15 million and within the previously guided range*.
Alex Pease, Chief Executive Officer of Watkin Jones, said: “First half trading was in line with our expectations, with a focus on execution and operational performance. Alongside progress on our schemes in build, we have continued to develop the Group’s longer term pipeline, with new land secured and further planning applications submitted. There has been gradual improvement in sentiment in the property investment market, which we expect to support a continued recovery in forward fund transaction demand, as evidenced in the forward sale of our PBSA scheme in Bristol in March.
“With our established and specialist end-to-end development platform and a sector leading reputation in the BTR and PBSA markets in the UK, our focus remains on positioning the business to best capitalise on a market recovery.”
Analyst meeting
There will be a pre-recorded audiocast of the HY24 Results presentation available to view on the Group’s website (www.watkinjonesplc.com) from 7am (BST) today. At 11am (BST), there will be a live 30-minute Q&A webcast for sell-side analysts, hosted by Alex Pease (CEO) and Sarah Sergeant (CFO). Those analysts wishing to join and receive dial in details should register their interest via watkinjones@buchanan.uk.com.
* Previous guidance indicated a range of £15 million to £20 million for FY24 Adjusted Operating Profit.
For further information:
| Watkin Jones plc | ||
| Alex Pease, 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 / Steph Whitmore | Tel: +44 (0) 20 7466 5000 |
| watkinjones@buchanan.uk.com | www.buchanan.uk.com |