Watkin Jones plc EBITDA +82%, Revenue +40.6%, Operating profit +83.5%

Watkin Jones plc (AIM:WJG), a leading UK developer and constructor of multi occupancy property assets, with a focus on the student accommodation sector, has given DirectorsTalk its maiden half year results for the six months ended 31 March 2016.  The Board is pleased to report a successful first six months of the financial year with trading in line with its expectations.

Financial Highlights

Notes

1           Adjusted EBITDA comprises operating profit before exceptional IPO costs, adding back charges for depreciation and amortisation.

2           Adjusted basic EPS is calculated using the profit for the period from continuing operations excluding exceptional IPO costs.

·      Strong revenue and profit performance during the half year driven by student accommodation developments

·      1.33 pence per share proposed interim dividend; in line with IPO guidance

·      £15.4 million net cash at 31 March 2016 (£4.0 million net debt at 31 March 2015)

·      New £40 million five year Revolving Credit Facility and £10 million Working Capital Facility with HSBC put in place at IPO to provide development funding flexibility and working capital headroom.  Unutilised at 31 March 2016.

Business Highlights

·      Successful admission to AIM on 23 March 2016, with business continuing to deliver strong operational performance through the process

·      £114 million development value of six student accommodation developments (1,660 beds) forward sold since 1 October 2015

·      £90 million development value in legal negotiations for forward sale of three further student accommodation developments (1,234 beds)

·      Planning permissions for nine student developments (3,478 beds) obtained since 1 October 2015, including five obtained since admission to AIM (1,733 beds)

·      Development pipeline – Over 11,300 student beds in the pipeline across 31 sites, with 17 forward sold and four more in legal negotiations or under offer

·      Delivery pipeline –

·      2016 deliveries – All forward sold and on target to be completed ahead of the 2017 academic year

·      2017 deliveries – All sites secured with planning and only one remaining to sell which is in legal negotiations

·      2018 deliveries – All sites secured and progressing satisfactorily

·      2019/20 deliveries – four sites secured and a number of additional site acquisitions progressing

·      Fresh Student Living Limited (“Fresh”) acquired for £15 million prior to IPO and successfully integrated into the Group. Fresh is engaged in the operational management of purpose built student accommodation assets

·      Fresh student accommodation beds under management already contracted to increase from 8,310 beds in FY 2016 to 17,924 beds by FY 2020

·      Five Nine Living Limited established for the management of multi occupancy property assets in the Private Rented Sector (‘PRS’), leveraging the expertise of Fresh

·      Watkin Jones plc Board formally established, comprising Grenville Turner (Chairman); Simon Laffin (non-executive director); Mark Watkin Jones (CEO) and Philip Byrom (CFO).

Commenting on the results, Mark Watkin Jones, Chief Executive Officer of Watkin Jones plc, said:  “Following on from our successful admission to AIM in March this year, we are delighted to report such a strong maiden set of half year results today.  Our student accommodation development business remains positively underpinned by the fundamentals of the student accommodation market and the forward sale model provides us with excellent visibility as to future earnings and cash flow.  The current student accommodation pipeline of 31 development sites underpins the business outlook to FY 2018, with 16 of the 17 developments for delivery by the end of FY 2017 already forward sold.  We are at advanced positions regarding the acquisition of a number of site opportunities that will be for delivery in FY 2019 and beyond.

 

An opportunity exists for our residential business, with the potential for Watkin Jones to apply its student accommodation model to the development and management of purpose built PRS schemes.

 

These strong interim results, coupled with the status of the forward sold student accommodation pipeline and the fact that all developments for this year’s delivery are progressing satisfactorily, provide the Board with confidence for the Group’s performance going forward.”