TIDMWJG
RNS Number : 2191S
Watkin Jones plc
05 November 2019
5 November 2019
Watkin Jones plc
('Watkin Jones' or the 'Group')
Strong FY19 trading anticipated to be in-line with
expectations
Capital Markets Day
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, is pleased to provide a
trading update for the year ended 30 September 2019 (the 'Period'
or 'FY19').
The Group's trading remained strong through the final quarter of
the year. Consequently, the Board expects to report revenues and
earnings for FY19 in line with its expectations, together with a
good cash performance in the Period.
All of the Group's business segments performed well and
delivered on their operational objectives for the year. The six
Purpose Built Student Accommodation (PBSA) developments (2,723
beds) scheduled for delivery in the year were successfully
completed, whilst good progress was also made in the development of
the forward sold PBSA and Build to Rent (BtR) assets scheduled for
delivery in FY20 and FY21. A robust performance was also achieved
by the Fresh Property Group and Residential businesses.
Development pipeline
Further progress was made in growing the pipeline of sites for
future development and in achieving forward sales of assets to the
Group's high-quality institutional client base, reflecting the
strength of demand for well-located assets in the Group's target
cities and the continued recognition of Watkin Jones as a preferred
development partner.
As set out in the Development Transaction Update on 3 October
2019, the Group has now forward sold all seven of its PBSA
developments (2,609 beds) scheduled for delivery in FY20 and has
forward sold 1,928 beds across four schemes for delivery in FY21,
with a further 448 beds currently in legals for sale. The Group's
current pipeline of forward sold and secured PBSA development sites
totals circa 6,670 beds across 17 sites, for delivery over the
period FY20 to FY24, of which 13 sites (5,447 beds) have
planning.
Following the recently announced sales of the Group's
developments in Sutton, Bournemouth and Sheffield, the forward sold
and secured BtR pipeline now comprises approximately 1,750
apartments across eight sites for delivery over the period FY20 to
FY23, of which 1,012 apartments across five sites have been forward
sold and a further site for 184 apartments has planning.
The Group has a number of other PBSA and BtR opportunities in
advanced stages of negotiation, which if satisfactorily concluded
would add a further circa 2,025 student beds and 1,150 BtR
apartments to the pipeline for delivery over the period FY21 to
FY23.
Delivery pipeline PBSA BtR
Beds Apartments
------------------------------- ----------------------------
FY20 FY21 FY22 FY23/ FY20 FY21 FY22 FY23/
FY24* FY24*
------ ------ ------ ------- ----- ----- ----- -------
Forward sold 2,609 1,928 - - 159 782 71 -
------ ------ ------ ------- ----- ----- ----- -------
In legals for sale - 448 - - - - - -
------ ------ ------ ------- ----- ----- ----- -------
Secured with planning - 462 - - - - 184 -
------ ------ ------ ------- ----- ----- ----- -------
Secured subject to planning - - 1,032 191 - - 213 336
------ ------ ------ ------- ----- ----- ----- -------
Advanced negotiation
to acquire - 415 1,610 - - - 350 800
------ ------ ------ ------- ----- ----- ----- -------
Total 2,609 3,253 2,642 191 159 782 818 1,136
------ ------ ------ ------- ----- ----- ----- -------
* FY23/24 relates to a two-year period
Outlook
The Board is encouraged by the increasing level of investor
demand that is being demonstrated for BtR assets. This provides
confidence that there is a broad range of potential institutional
investors with whom the Group can engage in order to replicate in
BtR the low risk forward sale model that has been so successful for
PBSA.
The pipeline of forward sold and secured development sites
ensures that the Group continues to maintain good visibility over
future revenues and earnings, whilst the fundamentals supporting
the PBSA and BtR markets remain strong. The Board remains confident
in the outlook for the Group and consider that it is well
positioned to capitalise further on the opportunities open to
it.
Capital Markets Day
At the Capital Markets Day to be held later today at Duncan
House in Stratford, Chief Executive Officer, Richard Simpson will
be joined by a number of the senior management team in providing an
update on the Group's growth strategy.
The presentations will provide information on the opportunity
which the Group has to increase the delivery rate across its two
core markets to 3,500 PBSA beds and 1,000 BtR apartments per annum
over the next five years, underpinned by long term, growing demand
from tenants and institutional investors, as well as providing
further insight into Watkin Jones' expertise and working capital
light business model. No further price-sensitive information will
be given in these presentations.
The presentations are being recorded and the slides, together
with the recording, will be made available via the Group's investor
relations website later today:
http://www.watkinjonesplc.com/results-centre/reports-presentations-and-publications/2019
Richard Simpson, Chief Executive Officer of Watkin Jones, said:
"We are pleased by the progress achieved by the Group in the last
twelve months. The robust PBSA activity in the period, coupled in
particular with the increasing momentum in BtR, firmly positions
Watkin Jones as the UK's leading developer and manager of
residential for rent."
Notice of Final Results
The Group will be announcing its Final Results on Tuesday, 14
January 2020. An analyst briefing will be held at 09.30hrs at the
offices of Buchanan, 107 Cheapside, London EC2V 6DN.
- Ends -
For further information:
Watkin Jones plc
Richard Simpson, Chief Executive Tel: +44 (0) 1248 362 516
Officer
Phil Byrom, Chief Financial Officer www.watkinjonesplc.com
Peel Hunt LLP (Nominated Adviser & Joint Corporate Tel: +44 (0) 20 7418
Broker) 8900
Mike Bell / Ed Allsopp www.peelhunt.com
Jefferies Hoare Govett (Joint Corporate Broker) Tel: +44 (0) 20 7029
8000
Max Jones / Will Soutar www.jefferies.com
Media enquiries:
Buchanan
Henry Harrison-Topham / Richard Oldworth Tel: +44 (0) 20 7466 5000
Jamie Hooper / Steph Watson
watkinjones@buchanan.uk.com 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 student accommodation and
Build to Rent 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 41,000 student beds across 123 sites, making it
a key player and leader in the UK purpose built student
accommodation market. In addition, the Fresh Property Group, the
Group's specialist accommodation management company, manages nearly
18,000 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 is now expanding its
operations into the Build to Rent sector.
The Group's competitive advantage lies in its experienced
management team and 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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END
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