Watkin Jones (WJG) , a developer and manager of residential for rent, updated markets on trading for FY23, meeting its target to complete four schemes, but slipping to profit break-even after incurring additional costs to ensure the successful completion of two schemes, after delivering H1 operating profit of £2 million. FY23 revenues are expected to exceed £400 million.
Following a review of overhead cost base and implementing a number of cost actions, the company said it's identified annualised savings of over £2 million to be delivered in FY24. The build-to-rent specialist also said that its exceptional provision for remedial works for legacy properties remains unchanged.
Looking ahead, the company’s outlook remains positive, with secured revenue for FY24 of c. £330 million. At 30 September, gross and net cash stood at c. £72 million and c. £43 million, respectively.
View from Vox
Watkin Jones remains a UK market leader in residential for rent development, focused on sectors with attractive long term growth outlooks. The company is 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.
Growing demand for housing coupled with a challenging rental landscape positions Watkins Jones well for continued growth. More specifically, the long-standing supply and demand imbalance in the housing market means that increasing numbers are renting for the medium to long term, leading to demand for high quality rental homes.
In addition, the shortage of student accommodation also highlights the demand for Watkin Jones, with UK purpose-built accommodation presenting itself as a mature, stable and income-producing asset.
Overall, despite the company being hit by some extra costs to complete schemes, the company remains in a strong position to deliver sustainable long-term growth.
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