TIDMWJG
RNS Number : 4074U
Watkin Jones plc
18 January 2017
For immediate release 18 January 2017
This announcement contains inside information
Watkin Jones plc
('Watkin Jones' or the 'Group')
Full year results for the year ended 30 September 2016
Watkin Jones plc (AIM:WJG), a leading UK developer and
constructor of multi occupancy property assets, with a focus on the
student accommodation sector, announces its maiden annual results
for the year ended 30 September 2016. The Board is pleased to
report a successful financial year with trading in line with its
expectations.
Financial Highlights
FY 2016 FY 2015 Movement
Revenue from
continuing operations GBP267.0 million GBP244.2 million +9.3%
Gross profit
from continuing
operations GBP53.8 million GBP44.0 million +22.2%
Operating profit
before exceptional
IPO costs(1) GBP37.9 million GBP32.5 million +16.7%
Adjusted EBITDA(2) GBP41.6 million GBP34.1 million +22.1%
Operating cash
inflow before
exceptional
IPO costs(1) GBP41.7 million GBP28.4 million +46.8%
Net cash GBP32.2 million GBP39.1 million -17.6%
Adjusted basic
EPS(3) 12.4 pence 10.4 pence +18.9%
Dividend per 4.0 pence n/a
share
Notes
1 Exceptional IPO costs of GBP26.6 million comprise GBP6.5
million costs associated with the Company's admission to AIM and
GBP20.1 million relating to the settlement of senior management
incentive plans
2 Adjusted EBITDA comprises operating profit from continuing
operations before exceptional IPO costs, plus the Group's share of
profit from joint ventures, adding back charges for depreciation
and amortisation.
3 Adjusted basic EPS is calculated on a proforma basis using the
profit for the period from continuing operations excluding
exceptional IPO costs and based on the number of shares in issue at
30 September 2016.
-- Strong revenue growth and record operating profit, before
exceptional IPO costs, driven by student accommodation
developments
-- 2.67 pence per share proposed final dividend, giving total
dividend of 4.0 pence per share, in line with IPO guidance
-- Robust cash performance, with a net cash inflow from
operating activities before exceptional IPO costs of GBP41.7
million (2015: GBP28.4 million)
-- GBP32.2 million of net cash at the year end (30 September
2015: GBP39.1 million), after exceptional IPO cash costs of GBP26.6
million, GBP14.5 million cash cost of acquiring Fresh Student
Living ("Fresh") and GBP10.0 million dividend to existing
shareholders prior to IPO
-- New GBP40.0 million five-year revolving credit facility and
GBP10.0 million working capital facility with HSBC, to provide
development funding flexibility and working capital headroom. All
these facilities were unutilised at 30 September 2016
Business Highlights
AIM listing and corporate governance
-- Successful admission to AIM listing on 23 March 2016, with
business delivering strong operational performance throughout the
process and since admission
-- Watkin Jones plc Board formally established ahead of IPO,
comprising Grenville Turner (Chairman), Simon Laffin (Non-Executive
Director), Mark Watkin Jones (CEO) and Philip Byrom (CFO)
Student accommodation development - sales and planning
-- GBP183.0 million of development value of eight student
accommodation schemes (2,615 beds), forward sold during the
year
-- GBP164.0 million of development value of five student
accommodation schemes (1,893 beds) forward sold since the year
end
-- In excess of GBP185.0 million of development value in legal
negotiations, for forward sale of seven further student
accommodation developments (2,166 beds)
-- Planning permissions for ten student developments (3,500
beds) granted during the year and a further four (1,579 beds)
granted between the year end and the date of this announcement
-- Planning permission consented for 8,260 beds of the pipeline
as at the date of this announcement.
Student accommodation development - pipeline
-- 9,469 student beds in the pipeline across 27 sites, with 15
forward sold and seven more forward
sales in legal negotiations
-- 2017 deliveries - nine student developments (2,860 beds)
sold, including one operational asset (590 beds). The remaining
2017 delivery (454 beds) in legal negotiations
-- 2018 deliveries - eleven student developments (3,485 beds)
scheduled for delivery, of which ten developments (3,370 beds) have
planning and five developments (1,840 beds) are forward sold
-- 2019/20 deliveries - six sites secured and a number of
additional site acquisitions progressing satisfactorily. One
development (511 beds) forward sold to date
Student accommodation asset management
-- Fresh successfully integrated, with beds under management
increased from 8,310 in FY 2016 to 12,337 in FY 2017, and currently
contracted to increase to 18,636 by FY 2020
Private rented sector ("PRS")
-- Five Nine Living Limited established to leverage Fresh's
property management expertise in PRS and
focus applied to sourcing suitable PRS development opportunities
Private residential
-- 127 residential plot sales achieved from the ongoing development of legacy sites
Commenting on the results, Mark Watkin Jones, Chief Executive
Officer of Watkin Jones plc, said:
"This has been a transformational year for the Group and we are
delighted to report such a strong set of maiden full year results,
which have seen positive movements across our key financial
metrics. Our student accommodation development business is robust.
It is positively underpinned by a buoyant market and our forward
sale model provides us with excellent visibility as to future
earnings and cash flow. We currently have a development pipeline of
9,469 beds across 27 sites, where we have planning permissions
granted for 8,260 beds. Nine of the ten schemes scheduled for
completion in FY 2017 have been successfully forward sold and the
tenth scheme is in legal negotiations. All schemes are progressing
well on site.
At 30 September 2016, Fresh Student Living, our specialist
student accommodation asset management business, was contracted to
manage 12,337 beds across 44 schemes.
By utilising positive market conditions and choosing only the
best opportunities, we expect to make further progress in our
student accommodation businesses.
As we near completion of our first PRS development in Leeds, we
are looking, while always being mindful of the need to expand in a
sustainable way, to build on our expertise and our institutional
relationships to develop real momentum in the PRS market and we are
looking at a number of exciting opportunities.
In private residential development, our approach is to utilise
our existing land bank and to acquire further sites when suitable
opportunities arise.
Watkin Jones has made a strong start to life as a public company
and has demonstrated its ability to grow with good visibility of
earnings and significant cash generation. Our prospects are
encouraging and our aspiration is to continue to expand in both
student accommodation and PRS, while adding to earnings by managing
the completed developments. We look forward to the next year with
confidence."
CHAIRMAN'S STATEMENT
Performance and dividend
This is our first annual report since our admission to AIM in
March 2016 and I am pleased with the progress the Group has made,
both commercially and with organising ourselves as a public
company. We had a very good first trading period and we met our
expectations for the year. Any uncertainty in our markets in the
immediate aftermath of the EU Referendum result dissipated quickly.
University places remain oversubscribed and as only 7% of students
in the UK come from the EU across the higher education sector, we
do not believe that Brexit will be a significant issue for the
Group.
One of the key attractions of the business is its strong cash
generation, which results from the forward sale model. This cash
generation underpins our ability to reward shareholders through
dividends.
Having paid an interim dividend of 1.33 pence per share in June,
the Board has recommended a final dividend of 2.67 pence per share,
giving a total dividend of 4.0 pence per share. With admission
having taken place towards the end of the first half of the
financial year, this total dividend represents two thirds of the
full year equivalent, giving an initial yield of 6% based on the
placing price of GBP1 per ordinary share. This is in line with our
stated intention at the time of the IPO. The dividend will be paid
on 28 February 2017 to shareholders on the register at close of
business on 27 January 2017. The shares will go ex-dividend on 26
January 2017.
Looking forward, our intention is to adopt a progressive
dividend policy, which will allow shareholders to benefit from the
Group's growth in earnings and cash flow.
Board and management
I joined the Board as Non-Executive Chairman ahead of the IPO,
along with Simon Laffin, who was appointed as a Non-Executive
Director and as chairman of the Audit Committee. The Board has four
Directors in total, including Mark Watkin Jones (CEO) and Philip
Byrom (CFO). Since the Board was formed, we have focused on
defining our activities, agreeing roles and responsibilities, and
setting out the processes and authorities that will govern our
work.
Simon and I have also spent considerable time getting to know
the business and the team. Watkin Jones has excellent people, with
real depth of talent. One of the business's key strengths is the
commitment of its employees, many of whom have worked for the Group
for their entire careers. Retaining their experience and bringing
them through the business has been an important factor in Watkin
Jones' growth. Having the right culture is critical for sustainable
success. The Board recognises its role in setting the Group's
culture and for making sure that it is appropriate for the business
and what it wants to achieve. That includes ensuring we challenge
appropriately and encourage the business to look for opportunities
to improve and do things differently.
Looking forward
Watkin Jones has made a positive start to life as a public
company and has demonstrated its ability to grow. Our prospects are
encouraging and our aspiration is to continue to expand in both
student accommodation and PRS, while adding to earnings by managing
the completed developments.
Grenville Turner
Independent Non-Executive Chairman
17 January 2017
CHIEF EXECUTIVE OFFICER'S REVIEW
Performance
We delivered a strong performance across the Group this year.
Revenue from continuing operations rose from GBP244.2 million in FY
2015 to GBP267.0 million in FY 2016, an increase of 9.3%, whilst
gross profit rose from GBP44.0 million in FY 2015 to GBP53.8
million in FY 2016, an increase of 22.2%. Operating profit before
exceptional IPO costs was 16.7% higher at GBP37.9 million (FY 2015:
GBP32.5 million), representing a margin of 14.2% (FY 2015: 13.3%).
One of the key features of our model is its strong cash generation
and we achieved an operating cash inflow, before exceptional IPO
costs, of GBP41.7 million (FY 2015: GBP28.4 million).
Developing student accommodation is our largest business and we
continued to perform well. We completed ten schemes with 3,819 beds
during FY 2016 and maintained our 100% record of finishing ahead of
the academic year. The Group acquired the student accommodation
management business, Fresh Student Living, in February 2016. Fresh
has continued to grow strongly and now has 12,337 beds under
management for FY 2017, compared to 8,310 beds in FY 2016, and is
currently contracted to manage 16,431 for FY 2018.
A key event in the financial year was the progression of our
first PRS scheme, a 322--apartment development in Leeds, which we
have forward sold to a leading institutional investor. Construction
is proceeding to plan, with completion scheduled in the first half
of FY 2017. We also launched Five Nine Living to manage PRS
schemes, drawing on Fresh's expertise.
Private residential sales were strong during the year, with 127
sales completed against 69 in FY 2015. We made good progress with
releasing cash from low-margin legacy sites.
Operating review
Student Accommodation development
The gross margin for the year on student accommodation
developments was 20.5%, compared to 18.2% for FY 2015. The
improvement reflects our move to solely developing our own projects
and away from lower margin contracting work for other
developers.
The student accommodation pipeline remains robust. Nine of the
ten schemes scheduled for completion in FY 2017 have been forward
sold with the remaining 2017 delivery in legal negotiation. We have
secured all our development sites for FY 2018. Ten of these have
planning consent and the remaining one is progressing
satisfactorily through the planning process. We have secured six
developments for FY 2019. Two of these have planning consent with
the remainder progressing satisfactorily. A number of other sites
are under offer, with a view to further building up the secured
pipeline for FY 2019.
In total, we currently have 27 development sites under offer and
in the pipeline, representing 9,469 beds and with an appraised
development value of approximately GBP800.0 million. Of these,
3,314 are for delivery by FY 2017, 3,485 are for delivery by FY
2018 and 2,670 are for delivery in FY 2019 and beyond.
During the year, we forward sold eight development sites with
2,615 beds.
At the date of this announcement, seven developments were in
legal negotiations (2,166 beds), with a total development value in
excess of GBP185.0 million.
We remained successful in securing planning consents, achieving
ten during FY 2016 (3,500 beds) and a further four (1,579 beds)
between the year end and the date of this announcement.
Our development sites are spread across the UK and we organise
the operating divisions responsible for building the schemes on
this basis. Negotiating national procurement terms with key
subcontractors and standardising development layouts is continuing
to help us control build costs.
Fresh Student Living
We acquired Fresh on 25 February 2016 and have successfully
integrated it into the Group. Fresh requires little working capital
and the consideration of GBP15.0 million was largely attributable
to the value of intangible assets.
Fresh provides student letting and operational management
services for a variety of clients. Contracts typically run for
between three and seven years and our expectation is for these
contracts to be renewed. Fresh also provides consultancy and
mobilisation services to clients for new schemes in development.
This is a key part of the complete solution we offer to
clients.
At 30 September 2016, Fresh was contracted to manage 12,337 beds
across 44 schemes, with an annual management fee income of GBP3.6
million. By FY 2020, Fresh is currently contracted to manage 18,636
beds across 61 schemes. The majority of the increase to FY 2020 is
through contracts with third parties. We do not include our own
development schemes in Fresh's pipeline until the exit strategy for
a particular site is determined and we are certain that Fresh will
manage it.
For the period post--acquisition, Fresh contributed revenue of
GBP2.8 million and gross profit of GBP1.7 million. On a
like--for--like basis, Fresh's revenues for the year to 30
September 2016 amounted to GBP5.1 million, compared to GBP2.6
million for FY 2015. The gross margin achieved is approximately
60%.
Private Residential
The residential development business achieved 127 sale
completions during the year, compared to 69 for FY 2015. This
resulted in a 65.3% increase in revenues to GBP26.3 million (FY
2015: GBP15.9 million).
The gross margin for the business was 11.5% (FY 2015: 16.6%) but
was held back by sales at two legacy development sites at nil
margin. Achieving these sales was a key objective for the business,
as it released cash from brought-forward inventory. Sales at the
two sites (Gorse Stacks in Chester and the canal marina development
at Droylsden, Manchester) totalled GBP11.0 million in the year. We
completed the sale of all but two of the apartments at Gorse Stacks
by the year end, with sales at Droylsden ongoing. The gross margin
for the residential business will continue to strengthen as more
profitable developments come on stream.
At the year end, the private residential business had a land
bank of 573 plots (FY 2015: 595 plots).
Private Rented Sector
PRS is a key part of our growth strategy. We are currently
undertaking our first purpose--built PRS development in Leeds. The
322-apartment scheme is scheduled for completion in FY 2017 and has
been forward sold to a leading institutional investor.
We aim to grow our PRS business sustainably and are reviewing
further opportunities. During the year, we also established Five
Nine Living, our management platform for PRS schemes. Five Nine
Living will manage the Leeds scheme on completion and we expect to
start taking market share going forwards.
Strategy
We have set clear strategic objectives for each part of our
business. By exploiting positive market conditions and choosing
only the best opportunities, we will grow our student accommodation
business and take further market share with Fresh Student
Living.
Our student accommodation expertise is directly transferable to
the PRS market. We are looking to build on our experience and our
institutional relationships to develop real momentum in this area,
while always being mindful of the need to expand in a sustainable
way. In private residential development, our approach is to utilise
our existing land bank and to acquire further sites if suitable
opportunities arise.
People
I want to thank everyone in the Group for their contributions
this year, in particular in stepping up to ensure we continued to
deliver for clients during the IPO process. We are fortunate to
have an extremely loyal and hardworking group of colleagues, and it
is important to me that we look after them and maximise their
potential. A key benefit of the IPO is the greater sense of
ownership it has given to our people, who all received shares
through an employee Share Incentive Plan ("SIP") on flotation.
Coupled with our culture of empowering people to take decisions,
this means our people truly want to see the business develop and
succeed.
Sustainability
Watkin Jones is naturally focused on the long term. Economic,
social and environmental sustainability is therefore integral to
the way we work. The Group has robust policies embedded in every
area of our activities, which offer support and guidance on how we
expect our team to conduct themselves. We look to understand and
address the needs of all our stakeholders, which include our
people, clients, supply chain, communities and our shareholders. We
also work hard to minimise our impact on both the local and global
environment.
Outlook
The outlook for FY 2017 is positive and we expect to make
further progress. Nine of the ten schemes scheduled to complete in
the year have been forward sold and are progressing well on site,
with the tenth scheme in legal negotiations.
Our forward sale model means that FY 2017 will also benefit from
our progress on schemes delivering in later years. We are looking
to complete eleven schemes in FY 2018. Ten have planning consents
and planning has been submitted on the remaining scheme. Some of
our larger 2019 schemes will also contribute to FY 2017
performance, in particular the 511-bed scheme in Stratford for the
University of London, which in terms of its development value is
our largest ever project.
Mark Watkin Jones
Chief Executive Officer
17 January 2017
CHIEF FINANCIAL OFFICER'S REVIEW
The Group delivered a strong financial performance in FY 2016,
with growth in revenue, gross margin and earnings, as well as a
robust cash inflow.
FY2016 FY 2015
Continuing operations GBPm GBPm Change
----------------------------------------- ------ -------- ------
Revenue 267.0 244.2 +9.3%
Gross profit 53.8 44.0 +22.2%
Overheads (15.9) (11.6) +37.4%
Operating profit before exceptional
IPO costs 37.9 32.5 +16.7%
Exceptional IPO costs (26.6) -
Operating profit 11.3 32.5
Share of profit in joint ventures 3.0 1.2
Net finance costs (1.0) (0.7)
Profit before tax 13.3 32.9
Tax (8.2) (6.3)
Profit for the year 5.1 26.6
Basic earnings per share from continuing 3.8p GBP26.61
operations
Adjusted basic earnings per share 12.4p 10.4p +18.9%
Dividend per share 4.0p -
----------------------------------------- ------ -------- ------
The adjusted basic earnings per share figures are shown for
comparative purposes on a proforma basis using the number of shares
in issue at 30 September 2016.
Revenue
Revenue from continuing operations increased by 9.3% to GBP267.0
million, as a result of good growth in our student accommodation
development business, an initial contribution from Fresh Student
Living and an increase in the number of sales completions in our
private residential business. More information on revenue growth in
each business can be found in the Chief Executive Officer's
Review.
Gross profit
Gross profit rose from GBP44.0 million in FY 2015 to GBP53.8
million this year, resulting in a gross margin of 20.1% (FY 2015:
18.0%). The higher gross margin reflects the increasing outturns
from our student accommodation projects, driven in part by the
quality of sites selected, the cessation of lower margin student
accommodation contracting work and the high gross margin on the
initial revenues contributed by Fresh. However, the gross margin
for the year was held back by the sale of legacy private
residential developments at nil margin.
Overheads
Overheads comprise administrative expenses and distribution
costs, and include key functions such as our in-house procurement,
quantity surveyors and commercial teams. Overheads increased by
37.4% to GBP15.9 million. This reflects expansion of the Group's
operations, the overheads attributable to Fresh and some additional
costs related to our new status as a public company.
Operating profit before exceptional IPO costs
Operating profit before the impact of exceptional IPO costs
increased by 16.7% to GBP37.9 million, representing a margin of
14.2% (FY 2015: 13.3%).
Exceptional IPO costs
The Group incurred a number of exceptional costs in relation to
the IPO in March 2016. These totalled GBP26.6 million and comprised
GBP6.5 million of transaction-related fees and commissions, and
GBP20.1 million for settling share--based management incentive
arrangements that triggered on completion of the IPO.
Share of profit in joint ventures
We have a number of project-specific joint ventures with Lacuna
Developments Limited, based in Northern Ireland, enabling us to
develop student accommodation schemes in Belfast. We completed one
such scheme in FY 2016 and forward sold a second. We also have a
joint venture interest in a student accommodation asset which we
had previously developed in Ipswich (Athena Hall). Our share of
profit in joint ventures for the year totalled GBP3.0 million, up
from GBP1.2 million in FY 2015.
Finance costs
Our net finance costs totalled GBP1.0 million, as compared to
the GBP0.7 million incurred in FY 2015. During the year, we put in
place new debt and working capital facilities (see statement of
financial position and cash flows below). Net finance costs
includes the costs of arranging these facilities, as well as
non-utilisation fees.
Taxation
The tax charge for the year was GBP8.2 million, representing an
effective tax rate of 65.6%. This is significantly higher than the
statutory rate of corporation tax of 20%, as a result of most of
the exceptional IPO costs incurred not being deductible for tax.
The underlying rate of tax for the year was approximately 20%.
Earnings per share
Basic earnings per share from continuing operations were 3.8
pence, after the impact of exceptional items. On a proforma basis,
using the number of shares in issue in Watkins Jones plc at 30
September 2016, adjusted earnings per share from continuing
operations, which is calculated before exceptional items, increased
by 18.9% to 12.4 pence (FY 2015: 10.4 pence).
Dividends
As discussed in the Chairman's Statement, the Board has
recommended a final dividend of 2.67 pence per share, giving a
total dividend for the year of 4.0 pence per share. This is in line
with our guidance at the time of the IPO.
The cash cost of the total dividend will be GBP10.2 million, of
which GBP3.4 million was paid in the year.
Adjusted EBITDA
Adjusted EBITDA is an important measure of underlying
performance for the Group. It is calculated as operating profit
plus profit from joint ventures, before interest, tax,
depreciation, amortisation and exceptional items.
Adjusted EBITDA increased by 22.1% to GBP41.6 million (FY 2015:
GBP34.1 million), representing an adjusted EBITDA margin of 15.6%
(FY 2015: 14.0%).
Statement of financial position and cash flows
The Group had net cash at the year end of GBP32.2 million,
comprising cash of GBP47.2 million less borrowings of GBP15.0
million. In comparison, net cash at 30 September 2015 stood at
GBP39.1 million, made up of GBP59.3 million of cash less borrowings
of GBP20.2 million. Excluding the impact of the exceptional IPO
costs of GBP26.6 million, the Group generated a net cash inflow
from operating activities of GBP41.7 million (FY 2015: GBP28.4
million).
During the year the Group acquired Fresh for a price of GBP15.0
million, the net cash cost of which was GBP14.5 million after
taking into account cash of GBP0.5 million in the balance sheet of
Fresh. The Group also paid GBP13.4 million in dividends, comprising
a pre-IPO dividend of GBP10.0 million and the interim dividend of
GBP3.4 million.
Our strong cash generation results from our forward sale model
and our progress in releasing cash from inventory and work in
progress, particularly associated with legacy residential and
commercial developments.
Inventory and work in progress stood at GBP128.2 million at 30
September 2016, compared to GBP119.7 million at the end of the
previous year. This balance will reduce as a result of the forward
sales announced between the year end and the date of this
announcement.
Prior to the IPO, we agreed a new GBP40.0 million, five-year
revolving credit facility ("RCF") and a GBP10.0 million working
capital facility, both with HSBC. The RCF is available to support
our land procurement and development opportunities and will be used
for strategic land acquisitions or to fund discrete development
activities where required, alongside the forward sale model. At the
year end, both the RCF and working capital facility were
unutilised.
Philip Byrom
Chief Financial Officer
17 January 2017
For further information:
Watkin Jones plc
Mark Watkin Jones, Chief Tel: +44 (0) 1248 362
Executive Officer 516
Philip Byrom, Chief Financial www.watkinjonesplc.com
Officer
Zeus Capital Limited (Nominated Adviser
& Joint Broker)
Corporate Finance
Dan Bate / Jamie Peel Tel: +44 (0) 161 831
1512
Corporate Broking Tel: +44 (0) 20 3829
5000
Dominic King / Benjamin Robertson www.zeuscapital.co.uk
Peel Hunt LLP (Joint Broker) Tel: +44 (0) 20 7418
8900
Mike Bell / Matthew Brooke-Hitching www.peelhunt.com
Media enquiries:
Buchanan
Henry Harrison-Topham / Richard Tel: +44 (0) 20 7466
Oldworth 5000
Jamie Hooper / Stephanie Watson
watkinjones@buchanan.uk.com www.buchanan.uk.com
Notes to Editors
Watkin Jones is a leading UK developer and constructor of multi
occupancy property assets, with a focus on the student
accommodation sector. The Group has strong relationships with
institutional investors, and a good reputation for successful,
on-time-delivery of high quality developments. Since 1999, Watkin
Jones has delivered over 31,800 student beds across 98 sites,
making it a key player and leader in the UK purpose built student
accommodation market. In addition, Watkin Jones has been
responsible for over 50 residential developments, ranging from
starter homes to executive housing and apartments.
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. Key components of the business model are:
-- Site identification - extensive experience of site
identification and acquisition facilitates high quality sites being
acquired;
-- Planning consents - in depth knowledge and experience of the
planning consent process specific to this type of asset facilitates
high success rates on planning applications;
-- In-house construction and delivery - in-house construction
expertise, management and delivery limits reliance on third parties
and, together with favourable contractual relationships with key
suppliers, enhances control of cost;
-- Funding structure - forward sale model reduces risk for
Watkin Jones and provides security and visibility of the asset
pipeline for investors. The Group has strong relationships with
blue chip investors, including a number that are repeat investors
in Watkin Jones developments; and
-- Asset management - dedicated property management division
provides a continued service solution to investors post development
completion and completes the 'end to end' business model.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2016
Year ended Year ended
30 September 30 September
2016 2015
Notes GBP'000 GBP'000
------------------------------------ ----- ------------ ------------
Continuing operations
Revenue 266,980 244,246
Cost of sales (213,169) (200,198)
------------------------------------ ----- ------------ ------------
Gross profit 53,811 44,048
Administrative expenses (14,551) (10,611)
Distribution costs (1,377) (981)
------------------------------------ ----- ------------ ------------
Operating profit before exceptional
IPO costs 37,883 32,456
Exceptional IPO costs 5 (26,561) -
------------------------------------ ----- ------------ ------------
Operating profit 11,322 32,456
Share of profit in joint ventures 2,972 1,165
Finance income 252 95
Finance costs (1,282) (810)
------------------------------------ ----- ------------ ------------
Profit before tax from continuing
operations 13,264 32,906
Income tax expense 6 (8,179) (6,296)
------------------------------------ ----- ------------ ------------
Profit for the year from continuing
operations 5,085 26,610
------------------------------------ ----- ------------ ------------
Discontinued operations
Loss after tax for the year from
discontinued operations (878) (4,433)
------------------------------------ ----- ------------ ------------
Profit for the year attributable
to ordinary equity holders of the
parent 4,207 22,177
------------------------------------ ----- ------------ ------------
Other comprehensive income
Subsequently reclassified to income
statement:
Net gain on available-for-sale
financial assets 116 112
------------------------------------ ----- ------------ ------------
Total comprehensive income for
the year attributable to ordinary
equity holders of the parent 4,323 22,289
------------------------------------ ----- ------------ ------------
Pence GBP
--------------------------------------------------------- ------ ------
Earnings per share for the year attributable to ordinary
equity holders of the parent
Basic earnings per share 3.123 22.177
--------------------------------------------------------- ------ ------
Basic earnings per share from continuing operations 7 3.774 26.610
--------------------------------------------------------- ------ ------
Adjusted basic earnings per share from continuing
operations (excluding operating exceptional costs) 723.489 26.610
--------------------------------------------------------- ------ ------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 September 2016
30 September 30 September
2016 2015
Notes GBP'000 GBP'000
-------------------------------------- ----- ------------ ------------
Non-current assets
Intangible assets 9 15,521 -
Property, plant and equipment 1,876 4,807
Investment in joint ventures 5,950 7,220
Deferred tax asset 262 1,514
Other financial assets 2,545 1,169
-------------------------------------- ----- ------------ ------------
26,154 14,710
-------------------------------------- ----- ------------ ------------
Current assets
Inventory and work in progress 128,157 119,683
Trade and other receivables 16,436 20,553
Cash and cash equivalents 12 47,221 59,270
-------------------------------------- ----- ------------ ------------
191,814 199,506
-------------------------------------- ----- ------------ ------------
Total assets 217,968 214,216
-------------------------------------- ----- ------------ ------------
Current liabilities
Trade and other payables (90,781) (69,696)
Provisions (253) (339)
Other financial liabilities (63) (47)
Interest-bearing loans and borrowings (14,970) (9,759)
Current tax liabilities (6,018) (7,077)
-------------------------------------- ----- ------------ ------------
(112,085) (86,918)
-------------------------------------- ----- ------------ ------------
Non-current liabilities
Interest-bearing loans and borrowings (43) (10,424)
Deferred tax liabilities (1,151) (396)
Provisions (1,957) (2,124)
Other non-current liabilities - (1,304)
-------------------------------------- ----- ------------ ------------
(3,151) (14,248)
-------------------------------------- ----- ------------ ------------
Total liabilities (115,236) (101,166)
-------------------------------------- ----- ------------ ------------
Net assets 102,732 113,050
-------------------------------------- ----- ------------ ------------
Equity
Share capital 2,553 1,000
Share premium 84,612 6,300
Merger reserve (75,383) -
Available-for-sale reserve 269 153
Retained earnings 90,681 105,597
-------------------------------------- ----- ------------ ------------
Total equity 102,732 113,050
-------------------------------------- ----- ------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2016
Available
Share Share Merger -for-sale Retained
capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------- --------- -------- --------- --------- ---------
Balance at 1 October
2014 1,000 6,300 - 41 83,420 90,761
--------------------- ------- --------- -------- --------- --------- ---------
Profit for the
year - - - - 22,177 22,177
Other comprehensive
income - - - 112 - 112
--------------------- ------- --------- -------- --------- --------- ---------
Balance at 30
September 2015 1,000 6,300 - 153 105,597 113,050
--------------------- ------- --------- -------- --------- --------- ---------
Profit for the
year - - - - 4,207 4,207
Other comprehensive
income - - - 116 - 116
Dividend paid
(note 8) - - - - (13,395) (13,395)
Share restructuring
prior to IPO 1,695 167,864 - - - 169,559
Capital reduction
prior to IPO - (167,864) - - 167,864 -
Issue of shares
on IPO 855 84,586 - - - 85,441
Issue of shares
to employees of
Fresh Student
Living Limited - 26 - - - 26
Issue of shares
to employee SIP 3 - - - - 3
Group reconstruction
of Watkin Jones
plc and Watkin
Jones Group Limited (1,000) (6,300) (75,383) - (173,592) (256,275)
--------------------- ------- --------- -------- --------- --------- ---------
Balance at 30
September 2016 2,553 84,612 (75,383) 269 90,681 102,732
--------------------- ------- --------- -------- --------- --------- ---------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 September 2016
Year ended Year ended
30 September 30 September
2016 2015
Notes GBP'000 GBP'000
------------------------------------- ----- ------------ ------------
Cash flows from operating activities
Cash inflow from operations 11 24,457 32,008
Interest received 252 95
Interest paid (1,408) (875)
Interest element of finance lease
rental payments (22) (20)
Tax paid (8,152) (2,777)
------------------------------------- ----- ------------ ------------
Net cash inflow from operating
activities 15,127 28,431
------------------------------------- ----- ------------ ------------
Cash flows from investing activities
Acquisition of property, plant
and equipment (150) (50)
Proceeds on disposal of property,
plant and equipment 2,750 70
Acquisition of Fresh Student Living
Limited (net of cash acquired) (14,496) -
Loan repayment from joint venture 4,242 1,339
Purchase of other financial assets (1,024) (378)
------------------------------------- ----- ------------ ------------
Net cash (outflow)/inflow from
investing activities (8,678) 981
------------------------------------- ----- ------------ ------------
Cash flows from financing activities
Dividends paid (13,395) -
Issue of shares prior to IPO 88,151 -
Issue of shares on IPO 85,441 -
Cash outflow on group reconstruction
of (173,592) -
Watkin Jones plc and Watkin Jones
Group Limited
Capital element of finance lease
rental payments (278) (393)
New bank loans - 8,940
Repayment of bank loans (4,825) (4,627)
------------------------------------- ----- ------------ ------------
Net cash (outflow)/inflow from
financing activities (18,498) 3,920
------------------------------------- ----- ------------ ------------
Net (decrease)/increase in cash (12,049) 33,332
Cash and cash equivalents at 1
October 2015 and 1 October 2014 59,270 25,938
------------------------------------- ----- ------------ ------------
Cash and cash equivalents at 30
September 2016 and 30 September
2015 12 47,221 59,270
------------------------------------- ----- ------------ ------------
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
for the year ended 30 September 2016
1. General information
Watkin Jones plc (the "Company") is a public 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 Company was incorporated as HDCO3 Limited on 23 September
2015.
The Company acquired all the issued shares in Watkin Jones Group
Limited on 15 March 2016. This was achieved through a combination
of a share for share exchange over 319,247 shares in Watkin Jones
Group Limited, involving the issue of 81,407,985 ordinary shares in
the Company at an issue price of GBP1 per share, and the completion
of an agreement to purchase the remaining 680,753 shares for an
amount of GBP173,592,015 in cash. This was settled on 23 March
2016. On 15 March 2016 the Company was re-registered as Watkin
Jones plc.
On 23 March 2016 the Company completed an Initial Public
Offering by way of a placing of 85,440,493 ordinary shares at 100
pence per share and a vendor placing of 45,900,100 ordinary shares
at 100 pence per share. The Company's shares were admitted to trade
on the Alternative Investment Market ("AIM") of the London Stock
Exchange on 23 March 2016.
The principal activities of the Company and its subsidiaries
(collectively "the Group") are those of property development and
the management of properties for multiple residential
occupation.
The consolidated financial statements for the Group for the year
ended 30 September 2016 comprises the Company and the subsidiaries
that were acquired by the Company before the listing of the
Company's shares on AIM. The basis of preparation of the
consolidated financial statements is set out in note 2 below.
This report was approved by the Directors on 17 January
2017.
2. Basis of preparation
The financial information set out above does not constitute
statutory accounts for the year ended 30 September 2016 or 2015 but
is derived from those accounts. Statutory accounts for the year
ended 30 September 2015 have been delivered to the Registrar of
Companies and the statutory accounts for the year ended 30
September 2016 will be delivered to the Registrar of Companies and
sent to all shareholders shortly. The auditors have reported on
those accounts; their reports were unqualified, did not draw any
attention to any matters by way of emphasis without qualifying
their report and did not contain statements under S498 (2) or (3)
of the Companies Act 2006 or equivalent preceding legislation.
The consolidated financial statements of the Group for the year
ended 30 September 2016 and the comparatives for the year ended 30
September 2015 have been prepared on the basis that Watkin Jones
plc was in existence throughout these periods. The terms of the
acquisition of the shares in Watkin Jones Group Limited were such
that the Group reconstruction should be accounted for as a
continuation of the existing Group rather than as an acquisition,
and as such merger accounting has been applied. The cash
consideration paid as part of the Group reconstruction has been
reflected against retained earnings as a distribution. Accordingly,
the financial statements and the comparatives have been prepared on
this basis.
The financial statements of the Group have been prepared and
approved by the Directors in accordance with International
Financial Reporting Standards as adopted by the EU. As a result of
the IPO, the Group prepared an admission document to AIM which
incorporated the first time adoption of IFRS adopted by the EU and
all transition adjustments.
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 financial statements have been prepared on a going concern
basis. The Directors consider that it is appropriate for the
financial statements to be prepared on this basis having considered
all relevant information, including the Group's trading and cash
flow forecasts, the trading opportunities available to the Group
and the ongoing support of its banks.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in the
financial statements. The financial statements are prepared on the
historical cost basis except as disclosed in these accounting
policies.
The financial statements are presented in pounds sterling and
all values are rounded to the nearest thousand (GBP'000), except
when otherwise indicated.
3. Accounting policies
With the exception of the accounting policy for intangible
assets, which has been adopted for the first time in the
preparation of these financial statements and is set out below, the
accounting policies used in preparing these financial statements
are the same as those set out and used in preparing the financial
information that is presented in the Company's Admission Document
to AIM dated 16 March 2016. The accounting policies will be
disclosed in full within the Group's forthcoming financial
statements.
3.1 Other intangible assets
The cost of intangibles acquired as part of a business
combination is the fair value at the date of acquisition.
Intangible assets other than goodwill are stated at cost less
accumulated amortisation and impairment losses. Amortisation is
charged to the consolidated statement of comprehensive income on a
straight-line basis over the estimated useful lives of the
intangible assets as follows:
Customer relationships: - 11 years
Brand: - 10 years
4. Segmental reporting
The Group has identified three segments for which it reports
under IFRS 8 'Operating Segments'. The following represents the
segments that the Group operates in:
a. Student Accommodation Development - purpose built student accommodation developments;
b. Residential Development - the development of traditional residential property; and
c. Student Accommodation Management - the management of student
accommodation property. This segment was established following the
acquisition of Fresh Student Living Limited on 25 February
2016.
Corporate - central revenue and costs not solely attributable to
any one division.
All revenues arise in the UK.
Performance is measured by the Board based on gross profit as
reported in the management accounts.
Student
Student Accommodation
Accommodation Residential Management Corporate Total
Year ended 30 September GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2016
---------------------------- ------------- ----------- ------------- --------- --------
Segmental revenue 237,163 26,312 2,828 677 266,980
---------------------------- ------------- ----------- ------------- --------- --------
Segmental gross profit 48,575 3,033 1,666 537 53,811
Administration expenses - - (1,375) (13,176) (14,551)
Distribution costs - - (1,377) (1,377)
Exceptional IPO costs - - - (26,561) (26,561)
Share of operating
profit in joint ventures 2,975 - - (3) 2,972
Finance income - - - 252 252
Finance costs - - - (1,282) (1,282)
---------------------------- ------------- ----------- ------------- --------- --------
Profit/(loss) before
tax 51,550 3,033 291 (41,610) 13,264
Taxation - - - (8,179) (8,179)
---------------------------- ------------- ----------- ------------- --------- --------
Continuing profit/(loss)
for the year 51,550 3,033 291 (49,789) 5,085
---------------------------- ------------- ----------- ------------- --------- --------
Loss from discontinued
operations (878)
---------------------------- ------------- ----------- ------------- --------- --------
Profit for the year
attributable to ordinary
equity shareholders
of the parent 4,207
---------------------------- ------------- ----------- ------------- --------- --------
Inventory and work
in progress 74,141 53,666 - - 127,807
---------------------------- ------------- ----------- ------------- --------- --------
Inventory and work
in progress - discontinued 350
---------------------------- ------------- ----------- ------------- --------- --------
Total inventory and
work in progress 128,157
---------------------------- ------------- ----------- ------------- --------- --------
Student
Accommodation Residential Corporate Total
Year ended 30 September 2015 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ------------- ----------- --------- --------
Segmental revenue 228,153 15,917 176 244,246
---------------------------------- ------------- ----------- --------- --------
Segmental gross profit/(loss) 41,505 2,650 (107) 44,048
Administration expenses - - (10,611) (10,611)
Distribution costs - - (981) (981)
Share of operating profit
in joint ventures 1,165 - - 1,165
Finance income - - 95 95
Finance costs - - (810) (810)
---------------------------------- ------------- ----------- --------- --------
Profit/(loss) before tax 42,670 2,650 (12,414) 32,906
Taxation - - (6,296) (6,296)
---------------------------------- ------------- ----------- --------- --------
Continuing profit/(loss)
for the year 42,670 2,650 (18,710) 26,610
---------------------------------- ------------- ----------- --------- --------
Loss from discontinued operations (4,433)
---------------------------------- ------------- ----------- --------- --------
Profit for the year attributable
to ordinary equity shareholders
of the parent 22,177
---------------------------------- ------------- ----------- --------- --------
Inventory and work in progress 43,996 57,659 - 101,655
---------------------------------- ------------- ----------- --------- --------
Inventory and work in progress
- discontinued 18,028
---------------------------------- ------------- ----------- --------- --------
Total inventory and work
in progress 119,683
---------------------------------- ------------- ----------- --------- --------
5. Exceptional IPO costs
Year ending Year ending
30 September 30 September
2016 2015
GBP'000 GBP'000
------------------------------ ------------ ------------
Exceptional IPO costs
IPO transaction costs 6,500 -
Management incentive payments 20,061 -
------------------------------ ------------ ------------
Total exceptional IPO costs 26,561 -
------------------------------ ------------ ------------
The charge for management incentive payments comprises amounts
payable to certain senior management of Watkin Jones Group Limited
in connection with various long term incentive plans which fell due
on the admission to AIM of Watkin Jones plc. The amount comprises a
total charge of GBP21,735,400, plus stamp duty costs of GBP98,440,
less an amount previously provided of GBP1,773,200. Of the total
incentive payments made, management invested GBP13,942,984 in
shares in Watkin Jones plc as part of the IPO.
6. Income taxes
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
-------------------------------------------------- ------------ ------------
Current income tax
UK corporation tax on profits for the year 7,508 7,212
Adjustments in respect of previous periods (299) (99)
-------------------------------------------------- ------------ ------------
Total current tax 7,209 7,113
-------------------------------------------------- ------------ ------------
Deferred tax
Origination and reversal of temporary differences 135 (892)
Impact of change in tax rate (52) 75
Adjustments in respect of prior year 887 -
-------------------------------------------------- ------------ ------------
Total deferred tax 970 (817)
-------------------------------------------------- ------------ ------------
Total tax expense 8,179 6,296
-------------------------------------------------- ------------ ------------
Reconciliation of total tax expense
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
------------------------------------------------------------- ------------ ------------
Accounting profit before tax from continuing operations 13,264 32,906
Accounting loss before tax from discontinued operations (1,098) (4,753)
------------------------------------------------------------- ------------ ------------
Accounting profit before income tax 12,166 28,153
Profit multiplied by standard rate of corporation tax in the
UK of 20.0% (2015: 20.5%) 2,433 5,771
Expenses not deductible 4,958 125
Joint ventures results reported net of tax (594) (239)
Other differences 30 418
Prior period adjustment 1,161 (99)
------------------------------------------------------------- ------------ ------------
At the effective rate of tax of 65.6% (2015: 21.2%) 7,988 5,976
------------------------------------------------------------- ------------ ------------
Income tax expense reported in the statement of profit or
loss 8,179 6,296
Income tax attributed to a discontinued activity (220) (320)
Income tax attributed to an available-for-sale asset 29 -
------------------------------------------------------------- ------------ ------------
7,988 5,976
------------------------------------------------------------- ------------ ------------
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 shares in issue during the year.
There is no difference between basic earnings per share and
diluted earnings per share as there are no dilutive share option
arrangements in place at 30 September 2016.
The following table reflects the income and share data used in
the basic and diluted EPS computations:
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
-------------------------------------------------------------- ------------ ------------
Profit attributable to ordinary equity holders of the parent 4,207 22,177
Profit from continuing operations attributable to ordinary
equity holders of the parent 5,085 26,610
Adjusted profit from continuing operations attributable to
ordinary equity holders of the parent (excluding exceptional
IPO costs) 31,646 26,610
-------------------------------------------------------------- ------------ ------------
Number Number
of shares of shares
------------------------------------------------------- ----------- ---------
Number of ordinary shares for basic earnings per share 134,729,152 1,000,000
------------------------------------------------------- ----------- ---------
Pence GBP
----------------------------------------------------------- ------ ------
Basic earnings per share from continuing operations
Basic profit for the year attributable to ordinary equity
holders of the parent 3.774 26.610
Adjusted proforma basic earnings per share from continuing
operations (excluding exceptional IPO costs)
Basic profit for the year attributable to ordinary equity
holders of the parent 23.489 26.610
----------------------------------------------------------- ------ ------
Using the number of shares in issue at 30 September 2016, the
adjusted proforma basic earnings per share from continuing
operations for the year ending 30 September 2016 would have been
12.397 pence (2015: 10.424 pence).
8. Dividends
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
----------------------------------------------------- ------------ ------------
Dividend paid prior to IPO 10,000 -
Interim dividend paid in February 2016 of 1.33 pence 3,395 -
----------------------------------------------------- ------------ ------------
13,395 -
----------------------------------------------------- ------------ ------------
The final dividend proposed for the year ended 30 September 2016
is 2.67 pence per ordinary share. This dividend was declared after
30 September 2016 and as such the liability of GBP6,816,000 has not
been recognised at that date.
9. Intangible assets
Customer
relationships Brand Goodwill Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- ------------- ------- -------- -------
Cost
At 1 October 2014 - - 3,193 3,193
Impairment during the year - - (3,193) (3,193)
---------------------------------------- ------------- ------- -------- -------
At 30 September 2015 - - - -
---------------------------------------- ------------- ------- -------- -------
Arising on acquisition of Fresh Student
Living (note 10) 5,604 499 9,744 15,847
---------------------------------------- ------------- ------- -------- -------
At 30 September 2016 5,604 499 9,744 15,847
---------------------------------------- ------------- ------- -------- -------
Amortisation
At 1 October 2014 - - - -
Amortisation for the year - - - -
---------------------------------------- ------------- ------- -------- -------
At 30 September 2015 - - - -
---------------------------------------- ------------- ------- -------- -------
Amortisation for the year (297) (29) - (326)
---------------------------------------- ------------- ------- -------- -------
At 30 September 2016 (297) (29) - (326)
---------------------------------------- ------------- ------- -------- -------
Net book value
As at 30 September 2016 5,307 470 9,744 15,521
---------------------------------------- ------------- ------- -------- -------
As at 30 September 2015 - - - -
---------------------------------------- ------------- ------- -------- -------
The Directors have reviewed the carrying value of the investment
in Fresh Student Living Limited, which is a single CGU, at 30
September 2016, compared to its recoverable amount and are
satisfied that no impairment is required. The recoverable amount
has been based on value in use, by reference to the budgets and
projected cash flows for the CGU over a 20 year period, with future
cash flows discounted at a rate of 10% to reflect the time value of
money.
10. Acquisitions
Acquisition of Fresh Student Living Limited
On 25 February 2016 Founded Living Limited, a subsidiary of
Watkin Jones Group Limited, acquired the 750 ordinary shares in
Fresh Student Living Limited ("Fresh") held by Mark and Glyn Watkin
Jones, who were both Directors of and shareholders in Watkin Jones
Group Limited, for a cash consideration of GBP11,835,512. The
shares acquired represented 77.48% of the issued shares of the
company.
On 23 March 2016, on satisfaction of the condition of admission
to AIM of Watkin Jones plc, Founded Living Limited acquired the 218
A ordinary shares held by various directors and senior managers of
Fresh, for a cash consideration of GBP3,164,488. The shares
acquired represented the remaining issued shares of the company. As
a condition of the acquisition of these shares, the vendor
shareholders were required to invest GBP1,397,609, being 50% of the
net of tax proceeds received, in shares in Watkin Jones plc as part
of the IPO.
The total consideration paid for the shares in Fresh was
therefore GBP15,000,000, plus stamp duty of GBP75,010.
Fresh is engaged in the management of purpose built student
accommodation. Its services include the letting and operational
management of properties, for which the company is engaged under a
management agreement and receives a management fee, as well as
consultancy and mobilisation services provided during the
development phase of a student property.
The resulting goodwill of GBP9,744,000 arising on the
acquisition has been capitalised and is subject to an annual
impairment review by management. Goodwill is attributed to Fresh's
knowledge and expertise in the letting and management of purpose
built student accommodation and in the synergy with the Group's
student accommodation development business.
The book and fair value of the net assets acquired in respect of
Fresh were as follows:
Fair value
Book value adjustment Fair value
GBP'000 GBP'000 GBP'000
------------------------------ ---------- ---------- ----------
Non-current assets
Intangible assets
Customer relationships - 5,604 5,604
Brand - 499 499
Goodwill - 9,744 9,744
Property, plant and equipment 90 - 90
Deferred tax asset 261 (228) 33
Other financial assets 150 54 204
------------------------------ ---------- ---------- ----------
501 15,673 16,174
------------------------------ ---------- ---------- ----------
Current assets
Trade and other receivables 1,262 - 1,262
Cash at bank and in hand 579 - 579
------------------------------ ---------- ---------- ----------
1,841 - 1,841
------------------------------ ---------- ---------- ----------
Total assets 2,342 15,673 18,015
------------------------------ ---------- ---------- ----------
Current liabilities
------------------------------ ---------- ---------- ----------
Trade and other payables (1,830) (10) (1,840)
------------------------------ ---------- ---------- ----------
(1,830) (10) (1,840)
------------------------------ ---------- ---------- ----------
Non-current liabilities
Deferred tax liabilities - (1,100) (1,100)
------------------------------ ---------- ---------- ----------
- (1,100) (1,100)
------------------------------ ---------- ---------- ----------
Total liabilities (1,830) (1,110) (2,940)
------------------------------ ---------- ---------- ----------
Net assets 512 14,563 15,075
------------------------------ ---------- ---------- ----------
In the period since acquisition, Fresh contributed revenue of
GBP2,828,000 and an operating profit of GBP291,000. Had Fresh been
acquired on 1 October 2015, it would have contributed a full-year
revenue of GBP5,148,000 and an operating profit of GBP623,000. The
Group's total revenue from continuing operations would have been
GBP269,300,000 and the Group's operating profit would have been
GBP11,654,000.
11. Reconciliation of operating profit to net cash flows from
operating activities
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
--------------------------------------------------------------- ------------ ------------
Profit before tax from continuing operations 13,264 32,906
Loss before tax from discontinued operations (1,098) (4,753)
--------------------------------------------------------------- ------------ ------------
Profit before tax 12,166 28,153
Depreciation 341 489
Amortisation of intangible assets 326 -
Loss/(profit) on sale of plant and equipment 80 (40)
Issue of shares to employee SIP and employees of Fresh Student
Living Limited 29 -
Finance income (252) (95)
Finance costs 1,282 810
Share of profit in joint ventures (2,972) (1,165)
Increase in inventory and work in progress (8,474) (28,026)
Interest capitalised in development land, inventory and work
in progress 148 329
Decrease in trade and other receivables 5,353 13,314
Increase in trade and other payables 16,682 15,489
Provision for property lease commitment (252) (443)
--------------------------------------------------------------- ------------ ------------
Net cash inflow from operating activities 24,457 32,008
--------------------------------------------------------------- ------------ ------------
Major non-cash transactions
There were no major non-cash transactions during the period.
12. Analysis of net cash/(debt)
At beginning Non-cash At end
of year Cash movements of year
flow
30 September 2016 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------------ -------- --------- --------
Cash at bank and in hand 59,270 (12,049) - 47,221
Finance leases (538) 278 - (260)
Bank loans (19,645) 4,825 67 (14,753)
------------------------- ------------ -------- --------- --------
Net cash 39,087 (6,946) 67 32,208
------------------------- ------------ -------- --------- --------
At beginning Non-cash At end
of year Cash movements of year
flow
30 September 2015 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------------ ------- --------- --------
Cash at bank and in hand 25,938 33,332 - 59,270
Finance leases (931) 393 - (538)
Bank loans (15,187) (4,313) (145) (19,645)
------------------------- ------------ ------- --------- --------
Net cash 9,820 29,412 (145) 39,087
------------------------- ------------ ------- --------- --------
13. Annual report
Copies of this announcement are available from the Company at
Units 21-22 Llandygai Industrial Estate, Llandygai, Bangor,
Gwynedd, LL57 4YH. The Group's annual report for the year ended 30
September 2016 will be posted to shareholders shortly and will be
available on our website at www.watkinjones.com.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
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