FY23 Trading Update

Watkin Jones plc

11 October 2023

 

11 October 2023

Watkin Jones plc

(the 'Group')

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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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: [phone]
Sarah Sergeant, Chief Financial Officer	www.watkinjonesplc.com
Peel Hunt LLP (Nominated Adviser & Joint Corporate Broker)		Tel: [phone]
Mike Bell / Ed Allsopp		www.peelhunt.com
Jefferies Hoare Govett (Joint Corporate Broker)		Tel: [phone]
James Umbers/David Sheehan / Paul Bundred		www.jefferies.com

Media enquiries:

Buchanan
Henry Harrison-Topham / Stephanie Whitmore	Tel: [phone]
[e-mail]	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 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'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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