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13 April 2022 |
Watkin Jones plc
(the 'Group')
H1-2022 Trading Update
Robust pipeline underpins confidence in full year delivery
The Group provides the following trading update for the half year ended 31 March 2022 (the 'period' or 'H1-2022').
- Sustained strong delivery across in-build schemes and pipeline development gives the Board continued confidence in the Group's full year performance.
- As anticipated, H1-2022 revenue was ahead of the prior year with gross profit and operating profit expected to be below last year, reflecting specific FY22 factors:
- A higher proportion of land sales in the period which as usual generate a lower margin than the ensuing development activity; The Group completed three land sales in the period with revenue of £55m compared to nil in H1 FY21.
- The planned portfolio sale of several PBSA assets which is under offer and expected to close in H2.
- The business continues to proactively manage inflationary price rises experienced in the period for both asset values and construction costs. This has involved a number of 'open book' discussions with purchasers during the sales process. Whilst this has in certain cases lengthened transaction timeframes, to date we have been able to successfully maintain our margins.
- The business has seen a rising level of investor demand and liquidity for residential for rent assets and the Group has another significant PBSA asset currently under offer for sale, in addition to those in the portfolio referred to above. There are a number of further assets at earlier stages of marketing and which are generating strong interest.
- Secured development pipeline of c. £1.8bn (H1-2021: £1.4bn).
- Good liquidity with gross cash of c. £45m (H1-2021: £80m) and net cash of c. £27m (H1-2021: £31m) at the half year end.
- Further to the position set out at the time of the full year results in January 2022, the Group continues to await the publication of the Government's detailed plans regarding additional initiatives relating to historic fire safety issues. We believe that residential leaseholders should not bear the cost of cladding and critical fire safety defect remediation and will update investors once Government proposals have been published and fully evaluated.
Richard Simpson, Chief Executive Officer of Watkin Jones, said : “We have continued to build on the positive momentum from the second half of last year. We are experiencing very strong investor demand across the markets in which we operate and are well progressed with a number of significant forward sales. This, together with our current momentum, gives confidence in delivery of our full year expectations.”
Notice of Interim Results
The Group's Interim Results will be announced on Tuesday 17 May 2022. There will be an in-person presentation for analysts at 09.30am on the day of the announcement, hosted by CEO Richard Simpson and CFO Sarah Sergeant. Please contact Buchanan for further details.
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