TIDMWJG
RNS Number : 2694N
Watkin Jones plc
19 May 2020
For immediate release 19 May 2020
Watkin Jones plc
('Watkin Jones' or the 'Group')
Half year results for the six months to 31 March 2020
'Strong first half performance, supplemented by measures to
protect people
and the business through the pandemic'
Watkin Jones plc (AIM:WJG), the UK's leading developer and
manager of residential for rent, with a focus on the build to rent
and student accommodation sectors, announces its results for the
six months ended 31 March 2020 (the 'period' or 'H1 2020'). The
Board is pleased to report a successful first six months of the
current financial year, which was largely prior to the disruption
caused by COVID-19.
Financial Highlights
H1 2020 H1 2019 Movement
(Restated(1)
)
Underlying results
Revenue GBP185.7 million GBP159.1 million +16.7%
Gross profit GBP41.9 million GBP38.8 million +8.0%
Adjusted profit before
tax(2) GBP26.6 million GBP25.0 million +6.4%
Adjusted EBITDA(3) GBP34.2 million GBP32.1 million +6.5%
Adjusted basic earnings
per share(2) 8.44 pence 7.77 pence +8.6%
Dividend per share Nil pence 2.75 pence -
Gross cash GBP72.4 million GBP57.9 million -
Net cash(4) GBP37.5 million GBP18.3 million -
Statutory results
Profit before tax GBP26.6 million GBP22.4 million +18.8%
EBITDA (3) GBP34.2 million GBP29.5 million +15.9%
Basic earnings per
share 8.44 pence 6.96 pence +21.3%
Richard Simpson, Chief Executive Officer of Watkin Jones,
said:
"The half year performance was strong and continued the momentum
towards our multi-year growth strategy which we set out in November
2019. Our businesses have all performed well in the period and
in-line with expectations.
We have responded carefully and cautiously to the challenges
presented by the COVID-19 pandemic and subsequent lock-down.
Primarily, we have focused on ensuring the health and safety of
employees, tenants and other stakeholders, with development sites
initially being closed to all non-essential work. Gradually, we
have been able to reopen most of them, to the extent allowed under
social distancing and government rules. I would like to thank all
our employees, tenants and other partners who have responded so
positively to this difficult situation.
Secondly, we have strengthened further our financial position by
conserving cash; reducing costs, suspending the interim dividend
and extending borrowing facilities. We believe that this ensures
the long-term resilience of the business as well as its capability
to respond quickly as markets recover. The Board believes that the
Group is now well-positioned for future growth and to take
advantage of economic opportunities that may arise from the current
unprecedented situation."
Financial headlines
-- 16.7% increase in revenue for the period versus the first
half year of last year, underpinned by both student accommodation
development and, increasingly, build to rent
-- 6.4% increase in adjusted profit before tax(2) to GBP26.6 million
-- Robust gross margin for the half year of 22.6% (H1 2019: 24.4%)
-- Strong liquidity position:
o GBP72.4 million gross cash at 31 March 2020 (31 March 2019:
GBP57.9 million)
o GBP37.5 million net cash (after deducting site specific loans
and HP creditors, but excluding IFRS 16 operating lease
liabilities), up from GBP18.3 million at 31 March 2019
o GBP100.0 million RCF with HSBC renewed for five years to May
2025, of which GBP71.1 million was undrawn at 31 March 2020
-- GBP390.0 million revenue to come from forward sold
contractually committed pipeline FY 2020 & FY 2021
-- As announced on 1 April 2020, the Group suspended the interim
dividend and withdrew its financial guidance as a result of the
current economic uncertainty and disruption caused by the COVID-19
pandemic. The Group will update the market on future guidance once
there is more clarity on the impact of COVID-19 on the Group's
activities and the markets in which it operates
-- The Board recognise the importance of the dividend to our
shareholders and are committed to resuming dividends as soon as
conditions stabilise.
Notes
1. Since 1 October 2019, the Group has applied IFRS 16 "Leases".
The Group has adopted the fully retrospective approach in applying
the standard, recognising its material impact on the Group's
results and statement of financial position. The comparative
results for H1 2019 have therefore been restated according to the
transition arrangements set out in the standard. Further details on
the nature of the changes to the Group's accounting required by
this standard, as well as its main impacts and the adjustments made
to restate the comparative figures are detailed in note 3 to the
interim financial statements.
2. For H1 2020 there is no difference between adjusted and
statutory profit before tax and basic earnings per share. For H1
2019, adjusted profit before tax and adjusted basic earnings per
share are calculated before the impact of an exceptional charge of
GBP2.6 million.
3. EBITDA comprises operating profit from continuing operations
plus the Group's profit from joint ventures, adding back charges
for depreciation and amortisation. For H1 2019, adjusted EBITDA is
stated before the exceptional charge of GBP2.6 million.
4. Net cash is stated after deducting site specific bank loans
and hire purchase creditors, but before deducting IFRS 16 operating
lease liabilities of GBP145.8 million at 31 March 2020 (31 March
2019: GBP152.1 million).
Business Highlights
-- Two further significant BtR sites secured in Birmingham (565
apartments) and Bath (323 apartments) on a subject to planning
basis
-- 2,660 BtR apartments, across 10 sites, now secured with over
1,000 apartments across five sites forward sold for delivery over
the period FY 2020 to FY 2022
-- 348 bed PBSA scheme forward sold at Wilder Street, Bristol
-- 100 additional PBSA beds agreed, with secured planning consent, at Kelaty House, Wembley
-- 591 PBSA beds on two sites secured in Bristol (291 beds) and
Bath (300 beds), both subject to planning
-- 613 bed on-campus partnership agreement with Cranfield
University concluded after 31 March 2020 for delivery in FY 2021
(415 beds) and FY 2022 (198 beds)
-- 7,200 PBSA beds, across 19 sites, now secured with over 5,500
beds across 13 sites forward sold for delivery over the period FY
2020 to FY 2022
-- 17,721 PBSA beds and BtR apartments now under management
across 64 schemes (H1 2019: 15,421 beds and apartments across 56
schemes), underlining the continued development of the Fresh
Property Group portfolio
-- We have taken a proactive and responsible approach to the
revised Government guidance on cladding systems. Despite not being
legally liable, the Group may undertake certain remedial cladding
works. The full cost to the Group, as previously announced, could
be in the range of GBP12 million - GBP15 million over the next two
years, but the final number will depend on the outcome of ongoing
discussions with property owners. Accordingly, a non-underlying
provision for these costs is likely to be made at this
year-end.
COVID-19 operational and financial update
-- We have remobilised construction activities where possible,
with appropriate health & safety practices in place, following
an initial closure of all sites
-- Sites in England, Wales and Northern Ireland now operating at
c.75% of pre COVID-19 resource levels
-- Our two Scottish sites currently remain closed due to Scottish Government instructions
-- Encouraging early progress to mitigate the impacts of the
disruption to our student accommodation deliveries for FY 2020; six
of the seven schemes are targeted for delivery by Q3 2020 and the
seventh is targeted by Q4 2020. The outcome for the residual scheme
is being discussed with the purchaser, with options including
accelerated work and phased delivery being considered
-- We anticipate a modest increase in costs to complete our
committed development programme during COVID-19 disruption
-- The outturn for FY 2020 will be largely dependent on the
completion of the seven student accommodation developments due this
year, the level of progress made with the construction of the
forward sold FY 2021 pipeline and whether the Group decides to
forward sell any of its development sites in the second half given
the uncertain investment environment
-- Activity in the institutional forward sale and land purchase
markets has been subdued since the period end. Whilst we anticipate
that activity in these markets will increase through the second
half, the Group will use its strong financial position to progress
forward sales and site acquisitions in the short term only if
negotiated terms prove satisfactory
-- We are offering support to students in the form of short-term
rent relief and extended periods of occupation, where appropriate,
to help them manage through this period at a voluntary cost of
c.GBP1.0 million. Approximately 50% of students left term time
residences in conjunction with the lock-down
-- The Group implemented comprehensive cash conservation
measures, including accessing the Government's Job Retention Scheme
for furloughed employees. Our remobilisation programme is leading
to a commensurate unwinding of use of the furlough scheme
-- Board fees and senior executive base pay has been temporarily reduced by 20%.
Analyst meeting
A conference call for analysts will be held at 09.30am today, 19
May 2020. A copy of the Half Year Results presentation is available
at the Group's website: http://www.watkinjonesplc.com
An audio webcast of the conference call with analysts will be
available after 12pm today:
https://webcasting.buchanan.uk.com/broadcast/5eb2fc6931da814c9fc6e7d0
For further information:
Watkin Jones plc
Richard Simpson, Chief Executive Tel: +44 (0) 20 3617 4453
Officer
Philip Byrom, Chief Financial www.watkinjonesplc.com
Officer
Peel Hunt LLP (Nominated Adviser Tel: +44 (0) 20 7418 8900
& Joint Corporate Broker)
Mike Bell / Ed Allsopp www.peelhunt.com
Jefferies Hoare Govett (Joint Corporate Tel: +44 (0) 20 7029 8000
Broker)
Max Jones / Will Soutar www.jefferies.com
Media enquiries:
Buchanan
Henry Harrison-Topham / Richard Oldworth
Jamie Hooper / Steph Watson Tel: +44 (0) 20 7466 5000
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 Build to Rent and student
accommodation 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 increasingly
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
Review of Performance
Results for the six months to 31 March 2020
Revenues for the period were in line with expectations at
GBP185.7 million, up 16.7% compared to GBP159.1 million for the
first half of last year, with all business segments performing
well. Good progress was made on all forward sold developments in
build in the first half of the year, with COVID-19 associated
disruption only starting to impact the Group's operations towards
the end of March 2020.
The revenue growth drove an 8.0% (GBP3.1m) higher gross profit
to GBP41.9 million (H1 2019: GBP38.8 million). The gross margin
remained robust at 22.6%, though below the gross margin achieved
for H1 2019 of 24.4%, reflecting the increased contribution from
the Group's build to rent developments. Build to rent revenues
generated a gross margin of 16.3%, compared to 24.1% for the
student accommodation development revenues in the period.
The higher gross profit fed through into operating profit, which
increased by GBP4.5 million (18.2%) to GBP29.2 million (H1 2019:
GBP24.7 million). Excluding the exceptional charge of GBP2.6
million made in H1 2019, operating profit increased by GBP1.9
million (7.0%).
Finance costs for the period amounted to GBP2.8 million (H1
2019: GBP2.6 million), including GBP2.3 million (H1 2019: GBP2.3
million) in respect of the finance cost of capitalised operating
leases under IFRS 16.
Profit before tax for the period was up 18.8% at GBP26.6 million
(H1 2019: GBP22.4 million), but excluding the last year's
exceptional charge, the growth was 6.4%. Basic earnings per share
for the period increased 8.6% to 8.44 pence, compared to the
adjusted basic earnings per share of 7.77 pence for H1 2019.
Segmental review
Build to Rent ('BtR')
BtR continues to grow in significance for the Group, with
revenue for the period rising to GBP36.5 million (H1 2019: GBP8.8
million). Revenues reflected further construction progress at the
already forward sold developments in Bournemouth for delivery in FY
2020 (159 apartments) and in Reading, Wembley and Sutton for
delivery in FY 2021 (782 apartments).
Gross profit for the period from BtR was GBP6.0 million (H1
2019: GBP1.9 million) at a margin of 16.3%, consistent with the
Group's previous margin guidance of 15%.
Whilst there were no new forward sales in the period, the Group
has secured two new significant sites, both of which are subject to
planning. The first site for 565 apartments is situated in
Birmingham and the second site for 323 apartments is in Bath.
Following these additions, the forward sold and secured BtR
pipeline now totals approximately 2,660 apartments across 10 sites,
of which 1,012 apartments across five sites have been forward sold
and a further site for 184 apartments has planning.
Student accommodation ('PBSA')
Revenues from PBSA were broadly in line with the prior period at
GBP120.8 million (H1 2019: GBP128.8 million). The slight decrease
is due to the lower number of beds in delivery for FY 2020 (2,609
beds), compared to FY 2019 (2,723 beds).
A strong gross margin of 24.1% was maintained on student
accommodation developments, a small decrease on the 24.7% gross
margin in H1 2019.
The Group strengthened its forward sold PBSA development
pipeline, completing the forward sale of the 348 bed development at
Wilder Street, Bristol, to a joint venture between KKR and Round
Hill Capital, for delivery in FY 2021. This follows an option
agreement announced in October 2018, which was conditional on full
planning consent being achieved. The consideration payable to
Watkin Jones for Wilder Street is circa GBP33.8 million, net of all
client funding and acquisition costs, and is payable over the
course of FY 2020 and FY 2021 as the development works are
progressed. The Group also obtained planning for and completed an
agreement with DWS to add a further 100 beds to the PBSA scheme at
Kelaty House in Wembley, for delivery in FY 2021.
After the half year end, the Group signed an on-campus
partnership agreement with Cranfield University to develop 613 beds
for delivery in FY 2021 (415 beds) and FY 2022 (198 beds), with a
development value to Watkin Jones of GBP48.0 million payable over
the period FY 2020 to FY 2022. The agreement also contains an
option arrangement for a potential second phase of the development,
comprising a further 252 beds. This represents a significant
addition to the Group's PBSA development pipeline and paves the way
for future similar university partnership arrangements.
In addition, the Group secured two further PBSA sites in the
period, both of which are subject to planning; a 291 bed scheme in
Bristol and a 300 bed scheme in Bath.
As previously reported, the Group has forward sold all seven of
its PBSA developments (2,609 beds) scheduled for delivery in FY
2020 and has now forward sold 2,730 beds across six schemes for
delivery in FY 2021. The Group's current pipeline of forward sold
and secured PBSA development sites totals circa 7,200 beds across
19 sites, of which 5,598 beds are forward sold and 6,060 beds have
planning.
Accommodation management
For the six months ended 31 March 2020, Fresh Property Group
('FPG') increased its revenues to GBP4.1 million (H1 2019: GBP3.9
million) and increased its gross profit to GBP2.6 million (H1 2019:
GBP2.4 million). This was another strong performance and continues
to reflect FPG's success in winning mandates to manage new schemes,
with a net increase of 2,300 student beds and build to rent
apartments under management at the start of FY 2020 (17,721 units
across 64 schemes) compared to a year earlier (15,421 units across
56 schemes).
The gross margin of 61.9% was broadly maintained in line with
the prior half year performance of 62.6%.
By FY 2023, FPG is currently appointed to manage approximately
20,500 student beds and build to rent apartments, including
expected renewals.
Residential
In H1 2020, the residential development business achieved 38
sales completions in line with its targets (H1 2019: 53 sales).
Prior to the half year end, the division also completed the forward
sold development of 35 apartments at Trafford Street, Chester.
In addition, during the period, works progressed under the
development agreement for the delivery of 75 apartments at
Marshgate, Stratford.
As a result, revenues for the residential development business
increased to GBP24.3 million for the half year, compared to GBP17.4
million for the equivalent prior period. The gross margin achieved
was 18.2% (H1 2019: 16.7%).
Cladding Update
In response to the revised Government guidance, issued in
January 2020, on the suitability of certain cladding solutions used
on high-rise residential buildings, the Group is working with the
owners of eight of its previously developed PBSA schemes to
remediate/replace cladding. The majority of the cladding is high
pressure laminate (HPL), which has been under more recent scrutiny
and is covered by the revised guidance. The Group is taking
proactive and responsible steps to ensure the safety of tenants,
working with building owners, even though the buildings concerned
were developed in accordance with all building regulations at the
time of construction and no liability is accepted for the
works.
Discussions with the property owners remain ongoing, but the
Board currently expects that this may result in a sharing of the
costs of certain remedial works with them. The gross cost to the
Group could be in the range of GBP12 million to GBP15 million, over
the next two years. A one-off non-underlying provision for this
cost is likely to be made at the year end, once the outcome of
those discussions has been established. The Group will look to
recover some of this cost from the sub-contractors and consultants
engaged on implementing the particular cladding systems at the
time. This is likely to take an extended period of time to achieve
and the extent of any recovery is currently uncertain.
Working with the COVID-19 risk
The Group's response to COVID-19 was first built on securing the
health and safety of our employees, tenants and partners. Secondly,
we moved to conserve cash and secure our liquidity.
We adopted all relevant guidance from the UK Government, Public
Health England and the World Health Organisation, implementing
remote working and enhanced health and safety protocols for
employees, tenants and stakeholders. The Group has now remobilised
construction activities, after having made comprehensive risk
assessments. We are currently operational in England, Wales and
Northern Ireland at circa 75% of pre COVID-19 disruption resourcing
levels, with significant site progress being maintained. The Group
has worked closely with our construction supply chain and partners
during this period to ensure they are paid as normal and to manage
continuity for remobilising activities. We are currently unable to
reinstate construction activity in Scotland due to the Scottish
Government's ban on non-essential construction work.
Activity in the institutional forward sale and land purchase
markets has been subdued since the period end. Whilst we anticipate
that activity in these markets will increase through the second
half, the Group will be able to use its strong financial position
to decide whether to progress forward sales and site acquisitions
in the short term if negotiated terms prove satisfactory.
The Group is supporting its student tenants through this
difficult time. Watkin Jones has operating leases across several
student accommodation assets. Approximately 50% of students left
their term time residences prior to the lockdown being implemented.
The Group has taken the decision to waive the 2019/20 final rent
instalments for students who left their accommodation prior to the
23 March. We are also providing accommodation after the end of term
for those who need to stay longer as a result of the disruption.
The cost to the Group for these measures is circa GBP1.0
million.
We have implemented comprehensive cash conservation measures,
including accessing the Government's Job Retention Scheme for
furloughed employees, which at its recent peak saw 43% of the
Group's employees (circa 185 employees) furloughed. Since early May
2020, the Group has begun to reemploy staff across most of its
construction sites, as work has recommenced. For furloughed
employees, the Group is topping up salaries to 80% of their base,
where their basic salary is above the Government's cap. The annual
pay increase, which was due on 1 April 2020, has not been made, and
the Board has temporarily reduced director fees and senior
executive base pay by 20%.
Dividend
As announced on 1 April 2020, the dividend has been temporarily
suspended as a pre-emptive response to the as yet unquantifiable
impact arising from COVID-19. The Board recognise the importance of
the dividend to our shareholders and are committed to resuming
dividends as soon as conditions stabilise.
Balance sheet and liquidity
The Group had gross cash at 31 March 2020 of GBP72.4 million (31
March 2019: GBP57.9 million). Net cash stood at GBP37.5 million (31
March 2019: GBP18.3 million), after deducting site specific loans
and hire purchase creditors totalling GBP34.9 million (H1 2019:
GBP39.6 million). This net cash balance is stated before deducting
operating lease liabilities of GBP145.8 million arising as a result
of the application of IFRS 16. The net cash balance stated before
deducting the operating lease liabilities is considered a more
relevant measure for the Group, as the lease liabilities relate
primarily to several historic student accommodation sale and
leaseback properties for which the lease rental liabilities are
covered by the student rental incomes received.
At 31 March 2020 the Group had drawn GBP28.9 million against its
revolving credit facility ('RCF') with HSBC. Subsequent to the
period end, the Group renewed the RCF for a further five year term
to May 2025, with an increase in the facility level from GBP60.0
million to GBP100.0 million on existing terms. The increased
facility level therefore gives unutilised headroom of GBP71.1
million. The overdraft facility of GBP10.0 million has also been
maintained.
With the gross cash balance and headroom in its banking
facilities, together with cash conservation measures and the future
cash inflow from the forward sold development pipeline, the Group
has a resilient liquidity position.
The reduction in gross cash for the half year period of GBP43.3
million (H1 2019: GBP48.7 million) reflects the Group's normal
seasonal cashflow profile which sees a cash utilisation in the
first half of the year, including tax and dividend payments of
GBP19.5 million for H1 2020. The Group is cash generative in the
second half of the year, as the final payments due on completion of
the current year's developments are received. The final payments
accrue as the development works progress and this is reflected in
the contract assets and trade receivables balances at 31 March
2020, which stood at GBP100.2 million (30 September 2019: GBP40.0
million).
Inventory and work in progress reduced by GBP25.6 million in the
period to GBP108.6 million, reflecting the realisation of work in
progress.
ESG
In the period, the Group continued to make good progress against
its Environmental, Social and Governance (ESG) initiatives. The
Group adheres to the strictest environmental standards and recorded
zero reportable environmental incidents in the year. More than 90%
of skip waste was diverted from landfill.
Commensurate with targeting higher BREEAM accreditations for our
developments, we are integrating the use of greener, more
sustainable materials into our builds. Low energy use initiatives,
such as Combined Heating and Power (CHP), photovoltaic cells and
air source heat pumps are also being looked at.
Safety is a key performance metric by which we judge operational
success and we are pleased to report a 24% reduction in our
combined reportable and non-reportable (minor) annual accident and
incident rate to 2,855 per 100,000 employees. Training was given to
our mental health first aiders and the Group continues to support
mental health awareness initiatives. The Group continues to uphold
strict compliance principles and procedures and maintained zero
ethical or compliance breaches during H1 2020.
Fire safety remains of paramount importance to Watkin Jones and
we construct our developments to high fire management
specifications.
Watkin Jones is committed to acting and behaving responsibly and
is in the process of scoping a coherent sustainability programme
that builds upon all of its efforts to date.
IFRS 16
The Group has applied IFRS 16 "Leases" for the first time in FY
2020. This standard impacts the Group's six historic student
accommodation sale and leaseback properties and leases for the
rental of office space and motor vehicles. The new standard creates
a right-of-use asset for these leases and a liability for future
lease payment. The Group has adopted the fully retrospective
approach in applying the standard, recognising its material impact
on the Group's results and statement of financial position. The
comparative results for H1 2019 and the statement of financial
position at 31 March 2019 and 30 September 2019 have therefore been
restated according to the transition arrangements set out in the
standard.
The right of use assets recognised at 31 March 2020 amount to
GBP127.2 million (30 September 2019: GBP131.4 million). These
primarily relate to the student accommodation sale and leaseback
properties, which accounted for GBP121.8 million of the balance.
Corresponding lease liabilities of GBP145.8 million have been
recognised (30 September 2019: GBP149.0 million), reflecting the
long term nature of the student accommodation leases, which have
remaining lease terms of between six and 32 years. The two leases
with the longest remaining terms, Dunaskin Mill, Glasgow and New
Bridewell, Bristol, which are strongly profitable, account for
GBP83.3 million of this balance.
The difference between the right of use assets and lease
liabilities at 30 September 2019 of GBP17.6 million, net of a
deferred tax asset of GBP3.3 million, is reflected in a reduction
in retained earnings of GBP14.3 million at that date.
The Group's income statements for the six months to 31 March
2020 and for the six months to 31 March 2019 have been impacted as
follows:
H1 2020 H1 2019
----------------------------- -----------------------------
Pre IFRS IFRS Pre IFRS IFRS
IFRS 16 16 IFRS 16 16
16 Impact Reported 16 Impact Reported
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Gross profit 40.6 1.3 41.9 37.6 1.2 38.8
Administrative expenses (12.8) 0.1 (12.7) (11.6) 0.1 (11.5)
Operating profit
before exceptional
items 27.8 1.4 29.2 26.0 1.3 27.3
Exceptional items - - - (2.6) - (2.6)
------- -------- ---------- ------- -------- ----------
Operating profit 27.8 1.4 29.2 23.4 1.3 24.7
Net finance charges (0.4) (2.2) (2.6) - (2.3) (2.3)
------- -------- ---------- ------- -------- ----------
Profit before tax 27.4 (0.8) 26.6 23.4 (1.0) 22.4
------- -------- ---------- ------- -------- ----------
Adjusted EBITDA 28.6 5.6 34.2 26.6 5.5 32.1
------- -------- ---------- ------- -------- ----------
Further details on the nature of the changes to the Group's
accounting required by this standard, as well as its main impacts
and the adjustments made to restate the comparative figures, are
provided in Note 3 to the interim financial statements.
Outlook
As previously announced, given the current economic uncertainty
and level of disruption to the Group's operations caused by the
COVID-19 pandemic, the Board has temporarily withdrawn any
financial guidance until the impact on the Group's performance and
sectors in which it operates can be more clearly understood. The
outturn for FY 2020 will be largely dependent on the completion of
the seven student accommodation developments due this year, the
level of progress made with the construction of the forward sold FY
2021 pipeline and whether the Group decides to forward sell any of
its development sites in the second half given the uncertain
investment environment. However, the Group's capital light business
model and robust liquidity enables such decisions to be made from a
position of strength and in the long term interest of shareholders.
Looking beyond this period of uncertainty, the fundamentals
supporting both our core sectors remain strong, and the Group
continues to be in an enviable position to progress as a market
leading developer .
Richard Simpson
Chief Executive Officer
19 May 2020
Consolidated Statement of Comprehensive Income
for the six month period ended 31 March 2020 (unaudited)
6 months to 6 months to 12 months to
31 March 31 March 30 September
2020 2019 2019
(Restated) (Restated)
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 185,672 159,104 374,785
Cost of sales (143,793) (120,282) (295,475)
------------ ------------ --------------
Gross profit 41,879 38,822 79,310
Administrative expenses (12,682) (11,513) (24,431)
Operating profit before exceptional
cost s 29,197 27,309 54,879
Exceptional costs 5 - (2,576) (2,576)
------------ ------------ --------------
Operating profit 29,197 24,733 52,303
Share of profit in joint ventures - - 286
Finance income 200 210 426
Finance costs (2,760) (2,567) (5,350)
------------ ------------ --------------
Profit before tax from continuing operations 26,637 22,376 47,665
Income tax expense 6 (5,061) (4,607) (9,054)
------------ ------------ --------------
Profit for the period attributable to ordinary equity holders of
the parent 21,576 17,769 38,611
============ ============ ==============
Other comprehensive income
Net gain on equity instruments
designated at fair value through other comprehensive income - - (2)
------------ ------------ --------------
Total comprehensive income for the period attributable to
ordinary equity holders of the parent 21,576 17,769 38,609
============ ============ ==============
Earnings per share for the period attributable to ordinary equity Pence Pence Pence
holders
of the parent
Basic earnings per share 7 8.437 6.961 15.119
============ ============ ==============
Diluted earnings per share 7 8.404 6.945 15.080
============ ============ ==============
Adjusted basic earnings per share (excluding exceptional costs) 7 8.437 7.769 16.028
============ ============ ==============
Adjusted diluted earnings per share (excluding exceptional costs) 7 8.404 7.751 15.987
============ ============ ==============
Consolidated Statement of Financial Position
as at 31 March 2020 (unaudited)
31 March 31 March 30 September
2020 2019 2019
(Restated) (Restated)
Notes GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 13,564 14,123 13,844
Right of use assets 9 127,241 135,442 131,367
Property, plant and equipment 4,964 4,670 4,966
Investment in joint ventures 2,794 2,558 2,794
Deferred tax asset 3,639 3,384 3,639
Other financial assets 1,139 1,162 1,139
----------- ------------ -------------
153,341 161,339 157,749
----------- ------------ -------------
Current assets
Inventory and work in progress 108,640 153,085 134,226
Contract assets 79,211 40,825 25,578
Trade and other receivables 21,012 9,216 14,443
Cash and cash equivalents 11 72,394 57,906 115,652
----------- ------------ -------------
281,257 261,032 289,899
----------- ------------ -------------
Total assets 434,598 422,371 447,648
=========== ============ =============
Current liabilities
Trade and other payables (69,294) (61,496) (81,431)
Contract liabilities (4,462) (8,849) (5,164)
Interest-bearing loans and
borrowings (1,021) (1,524) (1,324)
Lease liabilities (3,239) (3,239) (6,478)
Provisions (1,068) (933) (863)
Current tax liabilities (6,839) (9,412) (7,056)
----------- ------------ -------------
(85,923) (85,453) (102,316)
----------- ------------ -------------
Non-current liabilities
Interest-bearing loans and
borrowings (33,861) (38,089) (37,481)
Lease liabilities (142,517) (148,883) (142,558)
Provisions (2,389) (1,277) (2,594)
Deferred tax liabilities (1,042) (1,049) (1,042)
----------- ------------ -------------
(179,809) (189,298) (183,675)
----------- ------------ -------------
Total Liabilities (265,732) (274,751) (285,991)
=========== ============ =============
Net assets 168,866 147,620 161,657
=========== ============ =============
Equity
Share capital 2,553 2,553 2,553
Share premium 84,612 84,612 84,612
Merger reserve (75,383) (75,383) (75,383)
Fair value reserve of financial assets at FVOCI 434 436 434
Share-based payment reserve 2,263 2,166 2,311
Retained earnings 154,387 133,236 147,130
----------- ------------ -------------
Total Equity 168,866 147,620 161,657
=========== ============ =============
Consolidated Statement of Changes in Equity
for the six month period ended 31 March 2020 (unaudited)
Fair value
of financial Share-based
Share Share Merger assets payment Retained
Capital Premium Reserve at FVOCI reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP000 GBP'000 GBP'000
Balance at 30 September
2018 2,553 84,612 (75,383) 436 84 141,217 153,519
Effect of initial
application of IFRS
16 (note 3) - - - - - (12,655) (12,655)
Profit for the period - - - - - 17,769 17,769
Share-based payments - - - - 2,063 - 2,063
Dividend paid (note
8) - - - - - (13,095) (13,095)
Deferred tax equity
movement - - - - 19 - 19
--------- -------- ---------- ------------- ----------- ---------- ---------
Balance at 31 March
2019
(restated) 2,553 84,612 (75,383) 436 2,166 133,236 147,620
========= ======== ========== ============= =========== ========== =========
Profit for the period - - - - - 20,842 20,842
Share-based payments - - - - 145 - 145
Dividend paid (note
8) - - - - - (7,018) (7,018)
Deferred tax equity
movement - - - - - 70 70
Other comprehensive
income - - - (2) - - (2)
--------- -------- ---------- ------------- ----------- ---------- ---------
Balance at 30 September
2019 (restated) 2,553 84,612 (75,383) 434 2,311 147,130 161,657
========= ======== ========== ============= =========== ========== =========
Profit for the period - - - - - 21,576 21,576
Share-based payments - - - - (48) - (48)
Dividend paid (note
8) - - - - - (14,319) (14,319)
--------- -------- ---------- ------------- ----------- ---------- ---------
Balance at 31 March
2020 2,553 84,612 (75,383) 434 2,263 154,387 168,866
========= ======== ========== ============= =========== ========== =========
Consolidated Statement of Cash Flows
for the six month period ended 31 March 2020 (unaudited)
6 months 6 months 12 months
to to to
31 March 31 March 30 September
2020 2019 2019
(Restated) (Restated)
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Cash (outflow)/inflow from
operations 10 (13,058) (40,164) 38,942
Interest received 200 210 428
Interest paid (2,953) (2,760) (5,502)
Interest element of hire purchase
payments (23) (23) (48)
Tax paid (5,211) (2,871) (9,769)
--------- ---------- -------------
Net cash (outflow)/inflow from
operating
activities (21,045) (45,608) 24,051
========= ========== =============
Cash flows from investing activities
Acquisition of property, plant
and equipment (672) (185) (361)
Proceeds on disposal of property,
plant and equipment 19 39 87
Cash distribution received
from other financial assets - 188 209
Net cash (outflow)/inflow from
investing activities (653) 42 (65)
========= ========== =============
Cash flows from financing activities
Dividend paid 8 (14,319) (13,095) (20,113)
Capital element of hire purchase
payments (526) (621) (1,307)
Payment of lease liabilities (3,239) (3,204) (6,492)
Drawdown of bank loans 1,302 16,042 46,244
Repayment of bank loans (4,778) (2,290) (33,306)
Net cash outflow from financing
activities (21,560) (3,168) (14,974)
========= ========== =============
Net (decrease)/increase in
cash (43,258) (48,734) 9,012
Cash and cash equivalents at
beginning of the period 115,652 106,640 106,640
--------- ---------- -------------
Cash and cash equivalents at
end of the period 11 72,394 57,906 115,652
========= ========== =============
Notes to the consolidated financial information
1. General information
Watkin Jones plc (the 'Company') is a limited company
incorporated in the United Kingdom under the Companies Act 2006
(Registration number 09791105). The Company is domiciled in the
United Kingdom and its registered address is Units 21-22, Llandygai
Industrial Estate, Bangor, Gwynedd, LL57 4YH.
The principal activities of the Company and its subsidiaries
(collectively the 'Group') are the development and management of
multi-occupancy residential rental properties.
The consolidated interim financial statements of the Group for
the six month period ended 31 March 2020 comprises the Company and
its subsidiaries. The basis of preparation of the consolidated
interim financial statements is set out in note 2 below.
The financial information for the six months ended 31 March 2020
is unaudited. It does not constitute statutory financial statements
within the meaning of Section 434 of the Companies Act 2006. The
consolidated interim financial statements should be read in
conjunction with the financial information for the year ended 30
September 2019, which has been prepared in accordance with IFRSs as
adopted by the European Union. The report of the auditors on those
financial statements was unqualified, did not contain an emphasis
of matter paragraph and did not contain any statement under section
434 of the Companies Act 2006.
This report was approved by the directors on 18 May 2020.
2. Basis of preparation
The interim financial statements have been prepared based on
IFRS that are expected to exist at the date on which the Group
prepares its financial statements for the year ended 30 September
2020. To the extent that IFRS at 30 September 2020 do not reflect
the assumptions made in preparing the interim financial statements,
those financial statements may be subject to change.
The interim financial statements have been prepared on a going
concern basis and under the historical cost convention.
The interim financial statements have been presented in pounds
sterling and all values are rounded to the nearest thousand
(GBP'000), except when otherwise indicated.
The preparation of financial information in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or
actions, actual events may ultimately differ from those
estimates.
The interim financial statements do not include all financial
risk information and disclosures required in the annual financial
statements and they should be read in conjunction with the
financial information that is presented in the Company's audited
financial statements for the year ended 30 September 2019. There
has been no significant change in any risk management policies
since the date of the last audited financial statements.
3. Accounting policies
The accounting policies used in preparing these interim
financial statements are the same as those set out and used in
preparing the Company's audited financial statements for the year
ended 30 September 2019 with the exception of IFRS 16 "Leases".
IFRS 16 supersedes IAS 17 "Leases" and IFRIC 4 "Determining
whether an Arrangement contains a Lease". The standard introduces
new or amended requirements with respect to lease accounting under
a single on-balance sheet model. It introduces significant changes
to lessee accounting by removing the distinction between operating
and finance leases, requiring the recognition of a right of use
asset and a lease liability at commencement of all leases, except
for leases for a term of less than twelve months and leases of low
value assets. In contrast to lessee accounting, the requirements
for lessor accounting are largely unchanged.
The Group adopted IFRS 16 "Leases" from 1 October 2019. The
Group has chosen to apply the full retrospective approach under
which the retrospective restatement of each prior reporting period
is presented. The Group has elected to only apply IFRS 16 to
contracts previously identified as a lease under IAS 17
"Leases".
Nature of the effect of adoption of IFRS 16
The Group has six historic student accommodation sale and
leaseback properties and leases for the rental of offices and motor
vehicles. Before the adoption of IFRS 16, the Group classified
these leases as operating leases as they did not transfer
substantially all of the risks and rewards incidental to the
ownership of the respective leased assets. As such, the leased
assets were not capitalised and the lease payments were recognised
as rent expense in the statement of comprehensive income on a
straight-line basis over the lease term.
Upon adoption of IFRS 16, the Group has applied the following
approach :
-- to recognise right-of-use assets in the consolidated
statement of financial position. These were initially measured at
the present value of the future minimum lease payments from the
inception of each lease discounted at the Group's incremental
borrowing rate at the lease commencement date. Depreciation is
recognised in relation to this right-of-use asset with the initial
asset valuation calculated on the basis that depreciation has been
applied from the inception of the lease;
-- to recognise lease liabilities in the consolidated statement
of financial position. These were initially measured at the present
value of the future minimum lease payment from the inception of
each lease discounted at the Group's incremental borrowing rate at
the lease commencement date. After the commencement date, the
amount of lease liabilities has been increased to reflect the
accretion of interest and reduced for the lease payments made up
until the earliest reporting period presented; and
-- the difference between the right-of-use assets and lease
liabilities have been recognised as an adjustment to equity at the
beginning of the earliest comparative period presented. This
difference has been partially offset by the recognition of a
deferred tax asset due to the changes in assets and liabilities
resulting from IFRS 16.
The consolidated interim financial statements as of 31st March
2019 have been restated and the restated consolidated statement of
financial position as of 30th September 2019 is also presented. The
impacts of IFRS 16 are summarised hereafter and note 9 summarises
the right-of-use assets which have been recognised upon the
standard's adoption:
Impact on the consolidated income statement
Period for the six months ended 31 March 2019:
Published IFRS 16 Restated accounts
accounts Impact
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 159,104 - 159,104
Cost of sales (121,469) 1,187 (120,282)
---------- ---------- ------------------
Gross profit 37,635 1,187 38,822
Administrative expenses (11,612) 99 (11,513)
Operating profit before exceptional costs 26,023 1,286 27,309
Exceptional costs (2,576) - (2,576)
---------- ---------- ------------------
Operating profit 23,447 1,286 24,733
Finance income 210 - 210
Finance costs (223) (2,344) (2,567)
---------- ---------- ------------------
Profit before tax from continuing operations 23,434 (1,058) 22,376
Income tax expense (4,787) 180 (4,607)
---------- ---------- ------------------
Profit for the period attributable to
ordinary equity holders of the parent 18,647 (878) 17,769
========== ========== ==================
Total comprehensive income for the period attributable to ordinary equity
holders of the parent 18,647 (878) 17,769
========== ========== ==================
Earnings per share for the period attributable to ordinary equity holders Pence Pence Pence
of the parent
Basic earnings per share 7.305 (0.344) 6.961
========== ========== ==================
Diluted earnings per share 7.288 (0.343) 6.945
========== ========== ==================
Adjusted basic earnings per share (excluding exceptional costs) 8.113 (0.344) 7.769
========== ========== ==================
Adjusted diluted earnings per share (excluding exceptional costs) 8.094 (0.343) 7.751
========== ========== ==================
Impact on the consolidated statement of financial position
Position as at 31 March 2019:
Published accounts IFRS 16 Restated accounts
Impact
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 14,123 - 14,123
Right of use assets - 135,442 135,442
Property, plant and equipment 4,670 - 4,670
Investment in joint ventures 2,558 - 2,558
Deferred tax asset 236 3,148 3,384
Other financial assets 1,162 - 1,162
------------------- ---------- ------------------
22,749 138,590 161,339
------------------- ---------- ------------------
Current assets
Inventory and work in progress 153,085 - 153,085
Contract assets 40,825 - 40,825
Trade and other receivables 9,216 - 9,216
Cash and cash equivalents 57,906 - 57,906
------------------- ---------- ------------------
261,032 - 261,032
------------------- ---------- ------------------
Total assets 283,781 138,590 422,371
=================== ========== ==================
Current liabilities
Trade and other payables (61,496) - (61,496)
Contract liabilities (8,849) - (8,849)
Interest-bearing loans and borrowings (1,524) - (1,524)
Lease liabilities - (3,239) (3,239)
Provisions (933) - (933)
Current tax liabilities (9,412) - (9,412)
------------------- ---------- ------------------
(82,214) (3,239) (85,453)
------------------- ---------- ------------------
Non-current liabilities
Interest-bearing loans and borrowings (38,089) - (38,089)
Lease liabilities - (148,883) (148,883)
Provisions (1,277) - (1,277)
Deferred tax liabilities (1,049) - (1,049)
------------------- ---------- ------------------
(40,415) (148,883) (189,298)
------------------- ---------- ------------------
Total Liabilities (122,629) (152,122) (274,751)
=================== ========== ==================
Net assets 161,152 (13,532) 147,620
=================== ========== ==================
Equity
Share capital 2,553 - 2,553
Share premium 84,612 - 84,612
Merger reserve (75,383) - (75,383)
Fair value reserve of financial assets at FVOCI 436 - 436
Share-based payment reserve 2,166 - 2,166
Retained earnings 146,768 (13,532) 133,236
------------------- ---------- ------------------
Total Equity 161,152 (13,532) 147,620
=================== ========== ==================
Position as at 30 September 2019:
Published accounts IFRS 16 Restated accounts
Impact
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 13,844 - 13,844
Right of use assets - 131,367 131,367
Property, plant and equipment 4,966 - 4,966
Investment in joint ventures 2,794 - 2,794
Deferred tax asset 290 3,349 3,639
Other financial assets 1,139 - 1,139
------------------- ---------- ------------------
23,033 134,716 157,749
------------------- ---------- ------------------
Current assets
Inventory and work in progress 134,226 - 134,226
Contract assets 25,578 - 25,578
Trade and other receivables 14,443 - 14,443
Cash and cash equivalents 115,652 - 115,652
------------------- ---------- ------------------
289,899 - 289,899
------------------- ---------- ------------------
Total assets 312,932 134,716 447,648
=================== ========== ==================
Current liabilities
Trade and other payables (81,407) (24) (81,431)
Contract liabilities (5,164) - (5,164)
Interest-bearing loans and borrowings (1,324) - (1,324)
Lease liabilities - (6,478) (6,478)
Provisions (863) - (863)
Current tax liabilities (7,056) - (7,056)
------------------- ---------- ------------------
(95,814) (6,502) (102,316)
------------------- ---------- ------------------
Non-current liabilities
Interest-bearing loans and borrowings (37,481) - (37,481)
Lease liabilities - (142,558) (142,558)
Provisions (2,594) - (2,594)
Deferred tax liabilities (1,042) - (1,042)
------------------- ---------- ------------------
(41,117) (142,558) (183,675)
------------------- ---------- ------------------
Total Liabilities (136,931) (149,060) (285,991)
=================== ========== ==================
Net assets 176,001 (14,344) 161,657
=================== ========== ==================
Equity
Share capital 2,553 - 2,553
Share premium 84,612 - 84,612
Merger reserve (75,383) - (75,383)
Fair value reserve of financial assets at FVOCI 434 - 434
Share-based payment reserve 2,311 - 2,311
Retained earnings 161,474 (14,344) 147,130
------------------- ---------- ------------------
Total Equity 176,001 (14,344) 161,657
=================== ========== ==================
Impact on the consolidated statement of cash flows
Period for the six months ended 31 March 2019:
Published IFRS Restated
accounts 16 Impact accounts
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Cash (outflow)/inflow from operations (45,712) 5,548 (40,164)
Interest received 210 - 210
Interest paid (416) (2,344) (2,760)
Interest element of finance
lease rental payments (23) - (23)
Tax paid (2,871) - (2,871)
--------- ---------- ---------
Net cash (outflow)/inflow from
operating activities (48,812) 3,204 (45,608)
========= ========== =========
Cash flows from investing activities
Acquisition of property, plant
and equipment (185) - (185)
Proceeds on disposal of property,
plant and equipment 39 - 39
Cash distribution received from
other financial assets 188 - 188
Net cash inflow from investing
activities 42 - 42
========= ========== =========
Cash flows from financing activities
Dividend paid (13,095) - (13,095)
Capital element of finance lease
rental payments (621) - (621)
Payment of lease liabilities - (3,204) (3,204)
Drawdown of bank loans 16,042 - 16,042
Repayment of bank loans (2,290) - (2,290)
Net cash inflow/(outflow) from
financing activities 36 (3,204) (3,168)
========= ========== =========
Net decrease in cash (48,734) - (48,734)
Cash and cash equivalents at
beginning of the period 106,640 - 106,640
--------- ---------- ---------
Cash and cash equivalents at
end of the period 57,906 - 57,906
========= ========== =========
4. Segmental reporting
The Group has identified four segments for which it reports
under IFRS 8 'Operating segments'. The following represents the
segments that the Group operates in:
a. Student accommodation - the development of purpose-built student accommodation;
b. Build to rent - the development of build to rent accommodation;
b. Residential - the development of traditional residential property; and
c. Accommodation management - the management of student
accommodation and build to rent property.
Corporate - revenue from the development of commercial property
forming part of mixed use schemes and other revenue and costs not
solely attributable to any one operating segment.
All revenues arise in the UK.
Performance is measured by the Board based on gross profit as
reported in the management accounts. Apart from inventory and work
in progress, no other assets or liabilities are analysed into the
operating segments.
Build
6 months to 31 Student to Accommodation
March 2020 (unaudited) Accommodation rent Residential management Corporate Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental revenue 120,766 36,543 24,311 4,147 (95) 185,672
--------------- -------- ------------ -------------- ---------- ---------
Segmental gross
profit 29,150 5,959 4,432 2,565 (227) 41,879
Administration
expenses - - - - (12,682) (12,682)
Finance income - - - - 200 200
Finance costs - - - - (2,760) (2,760)
Profit/(loss)
before tax 29,150 5,959 4,432 2,565 (15,469) 26,637
Taxation - - - - (5,061) (5,061)
--------------- -------- ------------ -------------- ---------- ---------
Profit/(loss)
for the period 29,150 5,959 4,432 2,565 (20,530) 21,576
=============== ======== ============ ============== ========== =========
Inventory and
WIP 22,067 42,807 33,599 - 10,167 108,640
--------------- -------- ------------ -------------- ---------- ---------
Build
6 months to 31 Student to Accommodation
March 2019 (unaudited) Accommodation rent Residential management Corporate Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental revenue 128,754 8,767 17,433 3,857 293 159,104
--------------- -------- ------------ -------------- ---------- ---------
Segmental gross
profit 31,765 1,904 2,918 2,413 (178) 38,822
Administration
expenses - - - - (11,513) (11,513)
Exceptional costs - - - - (2,576) (2,576)
Finance income - - - - 210 210
Finance costs - - - - (2,567) (2,567)
--------------- -------- ------------ -------------- ---------- ---------
Profit/(loss)
before tax 31,765 1,904 2,918 2,413 (16,624) 22,376
Taxation - - - - (4,607) (4,607)
--------------- -------- ------------ -------------- ---------- ---------
Profit/(loss)
for the period 31,765 1,904 2,918 2,413 (21,231) 17,769
=============== ======== ============ ============== ========== =========
Inventory and
WIP 44,464 55,543 43,948 - 9,130 153,085
--------------- -------- ------------ -------------- ---------- ---------
5. Exceptional costs
6 months to 6 months to 12 months to
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
C ost of compensating the Group's CEO, Richard Simpson, for his forfeit
Unite Group plc ("Unite")
2018 bonus - (411) (411)
Cost of Watkin Jones plc share awards issued in compensating Richard
Simpson for his forfeit
Unite 2015 - 2017 share awards - (2,165) (2,165)
Total exceptional costs - (2,576) (2,576)
============= ============ ==============
6. Income taxes
The tax expense for the period has been calculated by applying
the estimated tax rate for the financial year ending 30 September
2020 of 19.0 % to the profit for the period.
7. Earnings per share
Basic earnings per share ("EPS") amounts are calculated by
dividing the net profit or loss for the year attributable to
ordinary equity holders of the parent by the weighted average
number of ordinary shares in issue during the year.
The following table reflects the income and share data used in
the basic EPS computations:
6 months to 6 months to 12 months to
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
Profit for the period attributable to ordinary equity
holders of the parent 21,576 17,769 38,611
Adjusted profit for the period attributable to
ordinary equity holders of the parent (excluding
exceptional costs after tax) 21,576 19,831 40,932
Number of shares Number of shares Number of shares
Number of ordinary shares for basic earnings per share 255,722,099 255,268,875 255,382,181
Adjustments for the effects of dilutive potential
ordinary shares 1,016,400 580,198 658,650
Weighted average number for diluted earnings per
share 256,738,499 255,849,073 256,040,831
Pence Pence Pence
Basic earnings per share
Basic profit for the period attributable to ordinary
equity holders of the parent 8.437 6.961 15.119
Adjusted basic earnings per share (excluding
exceptional costs after tax)
Adjusted profit for the period attributable to
ordinary equity holders of the parent 8.437 7.769 16.028
Diluted earnings per share
Basic profit for the period attributable to diluted
equity holders of the parent 8.404 6.945 15.080
Adjusted diluted earnings per share (excluding
exceptional costs after tax)
Adjusted profit for the period attributable to diluted
equity holders of the parent 8.404 7.751 15.987
8. Dividends
6 months to 6 months to 12 months to
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
Final dividend paid in February 2019 of 5.13 pence - 13,095 13,095
Interim dividend paid in June 2019 of 2.75 pence - - 7,018
Final dividend paid in February 2020 of 5.6 pence 14,319 - -
------------ ------------ --------------
14,319 13,095 20,113
============ ============ ==============
The interim dividend that would have been paid in June this year
has been suspended, due to the impact of Covid-19 on the
business.
9. Right of use assets
Student Accommodation Leases Motor Vehicle Leases
Office Leases
Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 30 September 2018 172,228 9,411 1,577 183,216
Additions - - 125 125
Disposals - - (105) (105)
----------------------------- ---------------- --------------------- --------
At 31 March 2019 172,228 9,411 1,597 183,236
Additions - - 247 247
Disposals - - (183) (183)
----------------------------- ---------------- --------------------- --------
At 30 September 2019 172,228 9,411 1,661 183,300
Additions - - 283 283
Disposals - - (248) (248)
----------------------------- ---------------- --------------------- --------
At 31 March 2020 172,228 9,411 1,696 183,335
----------------------------- ---------------- --------------------- --------
Depreciation
At 30 September 2018 39,658 3,412 562 43,632
Charge for the period 3,598 396 227 4,221
Disposals - - (59) (59)
------- ------ ------ -------
At 31 March 2019 43,256 3,808 730 47,794
Charge for the period 3,598 396 268 4,262
Disposals - - (123) (123)
------- ------ ------ -------
At 30 September 2019 46,854 4,204 875 51,933
Charge for the period 3,598 396 305 4,299
Disposals - - (138) (138)
------- ------ ------ -------
At 31 March 2020 50,452 4,600 1,042 56,094
------- ------ ------ -------
Net Book Value
At 31 March 2020 121,776 4,811 654 127,241
-------- ------ ------ --------
At 30 September 2019 125,374 5,207 786 131,367
-------- ------ ------ --------
At 31 March 2019 128,972 5,603 867 135,442
-------- ------ ------ --------
At 30 September 2018 132,570 5,999 1,015 139,584
-------- ------ ------ --------
10. Reconciliation of profit before tax to net cash flows from operating activities
12 months
6 months to 6 months to to
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
Profit before tax 26,637 22,335 47,688
Depreciation 4,676 4,526 9,318
Amortisation of intangible assets 280 280 559
Loss on sale of plant and equipment (3) (17) (42)
Finance income (200) (210) (428)
Finance costs 2,760 2,567 5,335
Share of profit in joint ventures - - (286)
Decrease/(increase) in inventory
and work in progress 25,586 (20,306) (1,948)
Interest capitalised in development
land, inventory and work in
progress 216 216 216
(Increase)/decrease in contract
assets (53,633) (32,067) (16,820)
(Increase)/decrease in trade
and other receivables (7,686) 9,606 4,682
(Decrease)/increase in contract
liabilities (702) (5,465) (9,150)
(Decrease)/increase in trade
and other payables (10,941) (23,231) (3,196)
(Decrease)/increase in provision
for property lease commitment - (461) 787
(Decrease)/Increase in share-based
payment reserve (48) 2,063 2,227
----------- ----------- -------------
Net cash (outflow)/inflow from
operating activities (13,058) (40,164) 38,942
----------- ----------- -------------
11. Analysis of net (debt)/cash
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 72,394 57,906 115,652
Hire purchase creditors (866) (1,403) (1,392)
Lease liabilities (145,756) (152,122) (149,036)
Bank loans (34,016) (38,210) (37,413)
-------------- -------------- ----------------
Net debt (108,244) (133,829) (72,189)
-------------- -------------- ----------------
Net cash (excluding lease liabilities) 37,512 18,293 76,847
============== ============== ================
- Ends -
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END
IR KVLFFBELZBBK
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May 19, 2020 02:00 ET (06:00 GMT)
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