Watkin Jones plc – Full Year Results

Watkin Jones plc – Full Year Results

Watkin Jones plc (AIM:WJG), the UK’s leading developer and manager of residential for rent, with a focus on the student accommodation and Build to Rent sectors, announces its annual results for the year ended 30 September 2019 (‘FY19’).

 

FY19

FY18

Change (%)

Revenue1

£374.8m

£363.1m

+3.2%

Gross profit1

£76.8m

£72.4m

+6.0%

Adjusted operating profit2

£52.3m

£49.6m

+5.4%

Adjusted profit before tax2

£52.3m

£50.1m

+4.5%

Adjusted basic earnings per share2

16.7p

16.0p

+4.6%

Dividend per share

8.35p

7.6p

+9.9%

Net cash

£76.8m

£80.2m

-4.1%

Statutory operating profit1

£49.7m

£53.9m

-7.8%

Statutory profit before tax1

 £49.7m

£54.3m

-8.5%

Basic earnings per share

 15.8p

17.3p

-8.9%

 

Financial Highlights

 

·    3.2% increase in revenue to £374.8 million (FY18: £363.1 million), underpinned by student accommodation development and benefiting from strong growth in build to rent (‘BtR’) revenues.

·    6.0% increase in gross profit to £76.8 million (FY18: £72.4 million), reflecting a robust gross margin of 20.5% (FY18: 20.0%).

·    4.5% increase in adjusted profit before tax2 to £52.3 million (FY18: £50.1 million).

·    9.9% increase in dividend to 8.35 pence per share, with a final dividend of 5.6 pence per share, fulfilling our previously stated policy of moving to a dividend twice covered by adjusted earnings.

·    £17.6 million net cash inflow from operating activities (FY18: £54.4 million).

·    £115.6 million gross cash at the year end (FY18: £106.6 million) and £76.8 million net cash (FY18: £80.2 million).

·    29.9% adjusted return on equity3 (FY18: 33.2%), reflecting the Group’s capital-light business model.

 

 

Richard Simpson, Chief Executive Officer of Watkin Jones, said: “We are pleased to report another year of growth for Watkin Jones, which demonstrates the strength and resilience of our capital light business model.  Despite the difficult macro environment caused by Brexit-related uncertainty, the Group has delivered further profitable growth, in line with expectations.

 

Importantly, for the first time, build to rent development made a significant contribution to the Group’s results and we expect it to become an increasingly important growth driver for the Group in the coming years.  Watkin Jones is now firmly positioned as the UK’s leading developer and manager of residential for rent schemes.

 

We are positive about the outlook for both the student accommodation and BtR sectors. There is continued investor appetite in those markets and we are confident in our ability to expand our position as market leader.  We therefore expect to continue to grow the business, in line with our strategy, and believe that the Group has a bright future.”

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