TIDMWJG
RNS Number : 7768G
Watkin Jones plc
01 June 2017
For immediate release 1 June 2017
Watkin Jones plc
('Watkin Jones' or the 'Group')
Half year results for the six months to 31 March 2017
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 half year results for
the six months ended 31 March 2017. The Board is pleased to report
a successful first six months of the financial year with trading in
line with its expectations.
Financial Highlights
H1 2017 H1 2016 Movement
Revenue GBP133.7 million GBP145.9 million -8.4%
Gross profit GBP29.1 million GBP23.5 million +23.8%
Adjusted EBITDA(1) GBP21.9 million GBP17.3 million +26.6%
Adjusted profit before
tax(2) GBP21.1 million GBP16.7 million +26.6%
Statutory operating GBP19.4 million (GBP9.5 million) n/a
profit/(loss)
Statutory profit /(loss) GBP21.1 million (GBP9.9 million) n/a
before tax
Adjusted basic EPS(2) 6.7 pence 5.2 pence +28.8%
Dividend per share 2.2 pence 1.33 pence n/a
Net cash GBP11.7 million GBP15.4 million -24.0%
-- Revenues for the half year were in line with management's
expectations, down 8.4% on the prior half year due to the timing of
forward development sales and GBP11.7 million of non-repeating
inventory sales of completed residential apartments in the first
half of the previous year. Revenues are expected to be stronger in
the second half of the current financial year
-- Strong profit growth for the half year driven by student
accommodation developments. Gross profit for the period increased
by 23.8% to GBP29.1 million (H1 2016: GBP23.5 million)
-- Gross margin for the six months to 31 March 2017 of 21.8% (H1
2016: 16.1%), reflecting the location and quality of student
accommodation schemes in development, as well as a full six months
contribution from Fresh Student Living, which was acquired into the
Group on 25 February 2016.
-- Progressive dividend policy: 10% increase in the interim
dividend to 2.2 pence per share (FY 2016: Interim dividend of 1.33
pence per share, equivalent to 2.0 pence per share on a full year
basis)
-- GBP11.7 million net cash at 31 March 2017 (GBP15.4 million at
31 March 2016), reflecting normal seasonal working capital
profile.
Notes
1 Adjusted EBITDA comprises operating profit from continuing
operations plus the Group's profit from joint ventures, adding back
charges for depreciation and amortisation. For H1 2016, the figure
is stated before exceptional IPO costs.
2 For H1 2017 there is no difference between profit before tax
and adjusted profit before tax. For H1 2016, adjusted profit before
tax is stated before exceptional IPO costs.
3 For H1 2017 there is no difference between basic and adjusted
basic EPS. For H1 2016, adjusted basic EPS is calculated 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.
Business Highlights
Student Accommodation Development
-- GBP216 million development value of seven student
accommodation developments (2,580 beds) sold since 1 October 2016,
including one operational asset (590 beds)
-- GBP292 million development value in legal negotiations for
forward sale of nine further student accommodation developments
(3,649 beds)
-- Development pipeline of over 11,200 student beds across 31
sites, with 15 forward sold and nine more in legal negotiations
-- Delivery pipeline:
-- FY 2017 deliveries - All ten student developments (3,314
beds) have been sold and are on target to be completed ahead of the
2017/18 academic year
-- FY 2018 deliveries - Ten student developments (3,415 beds)
scheduled for delivery. All sites are secured and have planning
consents. Five developments are forward sold (1,854 beds) and the
remaining five (1,561 beds) are in legal negotiation for sale
-- FY 2019 deliveries - Nine student developments (3,545 beds)
scheduled for delivery. Eight sites secured (3,191 beds), with the
remaining site in legal negotiation to purchase. Six sites have
planning (2,676 beds), with the remaining three sites progressing
through planning. One development forward sold (511 beds) and four
developments (2,088 beds) in legal negotiations for sale
-- FY 2020 deliveries - two sites secured and one in legal
negotiation to purchase, with a number of additional site
acquisitions progressing.
Build to Rent Development
-- Build to Rent Development pipeline is growing. One site
secured with planning in Sutton, two further secured sites are
progressing through planning in Belfast and Leicester and three
further sites are in negotiation for development subject to
planning. These six schemes are currently targeted for delivery
over the period FY 2019 - FY 2021.
Accommodation Management
-- Fresh Student Living - student beds under management
increased from 8,310 beds in FY 2016 to 12,117 beds in FY 2017.
Currently contracted to increase to 19,532 beds under management by
FY 2020
-- Five Nine Living - currently contracted to manage 535 Build
to Rent units, including the scheme completed in Leeds in the
current year.
Commenting on the results, Mark Watkin Jones, Chief Executive
Officer of Watkin Jones plc, said: "We are very pleased to be
reporting a strong set of half year results. The Group has seen
good profit growth in the first half, driven by our student
accommodation developments which are fundamental to the business.
We are seeing increased institutional demand for good quality
purpose built assets, and there are several new international funds
that have entered the market recently, which highlights the
continued attractiveness of the sector. Our forward sale model and
student accommodation pipeline of 31 developments provides us with
excellent visibility on earnings and cash flow.
We are encouraged by the progress we have made in the Build to
Rent sector and we are pleased that the Group has already secured
an excellent site in London, with solid progress also being made on
a number of other specific development projects. Our student
accommodation management businesses Fresh Student Living has had an
excellent first half and is contributing well to overall Group
performance. The Group has made progress in developing the Five
Nine Living business to provide similar letting and operational
management services for the Build to Rent Sector. Like our student
accommodation development business, accommodation management
provides us with good future earnings visibility.
On behalf of the Board I would like to thank all our staff for
helping the Group deliver a very good first half year performance,
and we look forward to the second half with much confidence."
Chief Executive's Statement
Results for the six months to 31 March 2017
The Board is pleased to report a growth in profits for the six
months to 31 March 2017, compared to the same period last year.
Revenues for the half year were in line with management's
expectations, down 8.4% on the prior half year due to the timing of
forward development sales and GBP11.7 million of non-repeating
inventory sales of completed residential apartments in the first
half of the previous year. Gross profit increased by GBP5.6 million
to GBP29.1 million (H1 2016: GBP23.5 million), giving a
significantly increased gross margin for the period of 21.8% (H1
2016: 16.1%), reflecting the location and quality of student
accommodation schemes in development, as well as a full six months
contribution from Fresh Student Living, which was acquired into the
Group on 25 February 2016.
Overhead costs for the period amounted to GBP9.7 million,
compared to GBP6.5 million for H1 2016. The increase reflects the
cost of additional personnel to support the growth in the business,
a full six months overhead cost for Fresh Student Living and the
additional overhead cost associated with operating as a listed
company.
Operating profit, excluding exceptional costs, increased by
14.1% to GBP19.4 million (H1 2016: GBP17.0 million).
The Group made a profit on the disposal of its joint venture
interest in Athena Hall (Jersey) Limited in the period of GBP0.9
million, realising a net cash inflow from the sale of GBP5.5
million. The Group's share of profit in joint ventures amounted to
GBP1.1 million (H1 2016: GBP Nil) and arose in respect of
developments in progress in Belfast.
After accounting for net finance costs of GBP0.3 million, the
Group's profit before tax for the period amounted to GBP21.1
million (H1 2016: GBP9.9 million loss).
Adjusted EBITDA for the period, including the profits from the
Group's joint venture interests, was GBP21.9 million and compares
to an adjusted EBITDA for the prior period of GBP17.3 million,
excluding exceptional IPO costs of GBP26.6 million.
Basic earnings per share were 6.7 pence for the period, an
increase of 28.8% compared to the adjusted basic earnings per share
for the prior period of 5.2 pence (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).
Segmental review
Student accommodation development
Revenues from student accommodation development amounted to
GBP115.2 million for the period and were GBP7.4 million lower than
for the comparative period last year. This was in line with
management's expectation and is attributable to the timing of
forward sales transactions. The value of developments in progress
for completion is higher than for the prior year and this will be
reflected in the revenues for the full year.
The gross margin for the period on student accommodation
developments amounted to 21.7%, compared to 17.9% for H1 2016. This
is a further strong improvement in the gross margin reflecting the
increased contribution from higher margin developments in
progress.
The Group has a strong student accommodation development
pipeline, currently comprising 31 development sites which will
deliver in excess of 11,200 beds to the market with an appraised
development value in excess of GBP920 million. This compares to a
pipeline of 31 development sites delivering 11,300 beds, with a
development value of GBP850 million, reported in the Group's
interim report last year. Of the current development pipeline, 28
are for delivery by FY 2019 and three are for delivery in FY
2020.
All developments for completion in the current financial year
are sold (3,314 beds), including one operational asset, and all are
on target for completion ahead of the 2017/18 academic year.
Ten developments (3,415 beds) are scheduled for delivery in FY
2018 and of these, five have been forward sold and five are in
advanced legal negotiations for sale.
Looking ahead to FY 2019, nine developments (3,545 beds) are
currently scheduled for delivery, eight of which are secured and
the purchase of the remaining site is in legal negotiation. Six of
the sites have planning (2,676 beds), with the remaining three
sites progressing through planning. One development has been
forward sold (511 beds) and four developments (2,088 beds) are in
legal negotiations for sale.
Since 1 October 2016, seven developments have been sold (2,580
beds) and nine are in legal negotiations to sell (3,649 beds), with
a total development value of GBP509 million. By comparison, this is
more than double the GBP200 million value of sites forward sold or
entered into legal negotiations in the equivalent prior period.
Build to Rent development
The Group has made good progress in securing its Build to Rent
development pipeline. During the period a site has been acquired in
Sutton, London with planning for 132 units, two secured sites in
Belfast and Leicester are progressing through planning and three
further sites are in negotiation for development subject to
planning. These six schemes are currently targeted for delivery
over the period FY 2019 to FY 2021.
Significant work has been undertaken in preparing the Group's
Build to Rent development specification, which has been essential
in order to specify our product offering to potential clients and
to enable potential schemes to be appropriately costed.
Accommodation management
Fresh Student Living Limited ('Fresh'), which provides ongoing
student letting and management services, was acquired by the Group
on 25 February 2016 in order to complete the Group's end-to-end
service offering to its clients, from the sourcing of sites through
to the operational management of the completed developments. Fresh
receives a fee for its management services, with all the direct
operating costs of a property remaining the responsibility of the
property owner. Fresh is engaged under management contracts which
are typically for between three and seven years, although some are
for longer.
For the six months ended 31 March 2017, Fresh contributed
revenues of GBP3.0 million and a gross profit of GBP1.9 million,
giving a gross margin of 63.2%. For the comparative one month
period from the date of acquisition to 31 March 2016, Fresh
contributed revenues of GBP0.4 million. For comparative purposes,
for the six months ended 31 March 2016, Fresh recorded revenues of
GBP2.2 million.
Fresh continues to grow rapidly in terms of its beds under
management. For the current year, Fresh is contracted to manage
12,117 beds across 43 schemes. This compares to 8,310 beds across
32 schemes under management in the prior year. By FY 2020, Fresh is
currently contracted to manage 19,532 beds across 65 schemes, which
is an increase of 1,608 beds since the date of the Group's last
interim report and an increase of 896 beds since the Group
published its Annual Report in January. Opportunities to develop
the Fresh business are a key focus for management and we continue
to succeed in winning contracts to manage non-Watkin Jones Group
developed assets.
Aligned to Fresh, the Group has made progress in developing the
Five Nine Living Limited ("Five Nine") business to provide similar
letting and operational management services to the Build to Rent
sector. Five Nine now has 535 units under management, across five
schemes, including the scheme recently completed in Leeds.
Residential development
In the six months to 31 March 2017, the residential development
business achieved 31 sales completions, as compared to 79 in H1
2016. The lower number of sales completions was in line with
management's expectation and reflects the fact that in the first
half of last year the division completed sales of 60 apartments
from two legacy development sites at Gorse Stacks, Chester and
Logie Green, Edinburgh that were in stock at the start of the
period. Excluding sales at these two developments, sales of new
build stock are ahead of the prior year. Expected new build sales
for this year are heavily weighted to the second half.
Revenues for the residential development business amounted to
GBP6.3 million, compared to GBP16.4 million for the equivalent
prior period. The gross margin improved to 17.5% from 7.4% in the
prior period. This improvement reflects the impact of nil margin
sales totalling GBP7.9 million in H1 2016 from the legacy
development site at Gorse Stacks, Chester.
Dividend
The Board has adopted a progressive dividend policy and has
declared an interim dividend for the period of 2.2 pence per share,
which is a 10% increase on the full year equivalent interim
dividend paid last year. It will be paid on 30 June 2017 to
shareholders on the register at close of business on 9 June 2017.
The shares will go ex-dividend on 8 June 2017. The Board expects to
announce a similar increase in the full year dividend.
In the prior year an interim dividend of 1.33 pence per share
was paid. As Watkin Jones plc was only admitted to trading on AIM
shortly before the end of the first half year in FY 2016, the Group
declared interim and final dividends representing two thirds of the
value the Board would have declared had the Company been admitted
to trading for the full year. On this basis the pro forma interim
dividend for the six months to 31 March 2016 would have been 2.0
pence per share.
Balance sheet and cashflow
The Group had net cash at 31 March 2017 of GBP11.7 million,
comprising cash of GBP25.1 million less borrowings of GBP13.4
million. This compares to net cash at 31 March 2016 of GBP15.4
million and at 30 September 2016 of GBP32.2 million.
The reduction in net cash for the period of GBP20.5 million
reflects the Group's normal cashflow profile which, depending on
the timing of forward development sales, sees a cash utilisation in
the first half of the year, followed by cash generation in the
second half of the year as development sites for delivery in future
years are forward sold and the significant final payments due on
completion of the current year's developments are received. The
cash outflow in the first half of the year reflects payments made
in respect of land acquisitions required for the development
pipeline, predominantly those which are currently in legal
negotiations for sale. Other cash outflows related to dividends
(GBP6.8 million) and tax (GBP3.1 million). Cash benefitted from the
proceeds from the disposal of the Group's joint venture interest in
Athena Hall (Jersey) Limited (GBP5.5 million) and a cash inflow
from the Group's development joint ventures in Belfast (GBP2.0
million).
The completion of the forward sale of those developments
currently in legal negotiations, together with the final payments
due on completion of this year's schemes will contribute
significantly to the Group's cash position in the second half of
the year.
The Group's interest in joint ventures was reduced by GBP5.3
million in the period as a consequence of the disposal of the
Group's interest in Athena Hall (Jersey) Limited.
Inventory and work in progress fell by GBP2.0 million in the
period to GBP126.0 million. However, a further reduction is
expected in the second half of the year as the forward sales of the
sites currently in legal negotiations complete.
Outlook
The Group's student accommodation development business continues
to be underpinned by the attractive fundamentals of the student
accommodation market, with the Group continuing to see strong
demand from UK and international clients. We have seen increased
institutional demand for good quality purpose built assets, with a
number of new international funds recently entering the market.
This has had a positive effect on development values as competition
has increased and yields have sharpened. Clients looking for scale
see partnering with Watkin Jones as the best way to secure new
assets in prime locations. The forward sale model and student
accommodation pipeline of 31 sites provides the Group with
excellent visibility on future earnings and cash flow.
Encouraging progress has been made in the Build to Rent sector,
with development opportunities gathering momentum. The Group has
secured an excellent site with planning in Sutton, London and we
are actively progressing on other sites through the planning
process as well as negotiating several specific development
opportunities.
The student accommodation management business through Fresh is
expected to continue making an increased contribution to the
Group's results. We have high visibility on the significant growth
in its contracted beds under management through to FY 2020 and we
will continue to target further expansion of this burgeoning
business. Leveraging the expertise in Fresh, the Five Nine Living
offer to the Build to Rent sector is becoming established and we
remain positive in the future outlook for this still evolving
market.
The status of the forward sold student accommodation development
pipeline, together with the progress being made in the Group's
other business segments, supports a positive outlook for the
Group's performance.
Mark Watkin Jones
Chief Executive Officer
1 June 2017
For further information:
Watkin Jones plc
Mark Watkin Jones, Chief Executive Tel: +44 (0) 1248 362 516
Officer
Phil Byrom, Chief Financial Officer www.watkinjonesplc.com
Peel Hunt LLP (Nominated Adviser & Joint Corporate Tel: +44 (0) 20 7418
Broker) 8900
Mike Bell / Justin Jones / Matthew Brooke-Hitching www.peelhunt.com
Jefferies Hoare Govett (Joint Corporate Broker) Tel: +44 (0) 20 7029
8000
Max Jones / Will Souter 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 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.
Watkin Jones was admitted to trading on AIM in March 2016 with
the ticker WJG.L. For additional information please visit:
www.watkinjonesplc.com
Consolidated Statement of Comprehensive Income
for the six month period ended 31 March 2017 (unaudited)
12 months to
6 months to 6 months to 30 September
31 March 2017 31 March 2016 2016
Notes GBP'000 GBP'000 GBP'000
Continuing
operations
Revenue 133,676 145,888 266,980
Cost of sales (104,558) (122,359) (213,169)
------------------------------ ------------------------------- -----------------------------
Gross profit 29,118 23,529 53,811
Administrative
expenses (8,924) (6,042) (14,551)
Distribution costs (768) (464) (1,377)
------------------------------ ------------------------------- -----------------------------
Operating profit
before exceptional
IPO costs 19,426 17,023 37,883
Exceptional IPO costs - (26,561) (26,561)
------------------------------ ------------------------------- -----------------------------
Operating
profit/(loss) 19,426 (9,538) 11,322
Profit on disposal of
interest in joint
venture 5 930 - -
Share of profit in
joint ventures 1,119 - 2,972
Finance income 72 127 252
Finance costs (432) (466) (1,282)
------------------------------ ------------------------------- -----------------------------
Profit/(loss) before
tax from continuing
operations 21,115 (9,877) 13,264
Income tax expense 6 (4,031) (3,348) (8,179)
------------------------------ ------------------------------- -----------------------------
Profit/(loss) for the
period from
continuing
operations 17,084 (13,225) 5,085
------------------------------ ------------------------------- -----------------------------
Discontinued
operations
Profit/(Loss) after
tax for the period
from discontinued
operations - 86 (878)
------------------------------ ------------------------------- -----------------------------
Profit/(loss) for the
period attributable
to ordinary equity
holders of the
parent 17,084 (13,139) 4,207
============================== =============================== =============================
Other comprehensive
income
Net gain on
available-for-sale
financial assets 46 87 116
------------------------------ ------------------------------- -----------------------------
Total comprehensive
income/(loss) for
the period
attributable to
ordinary equity
holders of
the parent 17,130 (13,052) 4,323
============================== =============================== =============================
Earnings per share Pence Pence Pence
for the period
attributable to
ordinary equity
holders of the parent
Basic earnings per
share 7 6.693 (96.892) 3.123
============================== =============================== =============================
Basic earnings per
share for continuing
operations 7 6.693 (97.526) 3.774
============================== =============================== =============================
Adjusted basic
earnings per share
for continuing
operations
(excluding operating
exceptional
costs) 7 6.693 97.814 23.489
============================== =============================== =============================
Consolidated Statement of Financial Position
as at 31 March 2017 (unaudited)
31 March 31 March 30 September
2017 2016 2016
Notes GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 15,242 15,572 15,521
Property, plant and equipment 3,098 4,648 1,876
Investment in joint ventures 670 5,077 5,950
Deferred tax asset 263 1,369 262
Other financial assets 2,603 2,505 2,545
21,876 29,171 26,154
--------- --------- -------------
Current assets
Inventory and work in progress 126,040 90,022 128,157
Trade and other receivables 20,839 20,761 16,436
Cash and cash equivalents 10 25,111 32,604 47,221
171,990 143,387 191,814
--------- --------- -------------
Total assets 193,866 172,558 217,968
========= ========= =============
Current liabilities
Trade and other payables (56,960) (59,421) (90,781)
Provisions (253) (339) (253)
Other financial liabilities (35) (56) (63)
Interest-bearing loans and borrowings (4,307) (16,329) (14,970)
Current tax liabilities (6,992) (3,165) (6,018)
(68,547) (79,310) (112,085)
--------- --------- -------------
Non-current liabilities
Interest-bearing loans and borrowings (9,131) (912) (43)
Deferred tax liabilities (1,139) (1,463) (1,151)
Provisions (1,957) (2,124) (1,957)
(12,227) (4,499) (3,151)
--------- --------- -------------
Total Liabilities (80,774) (83,809) (115,236)
========= ========= =============
Net assets 113,092 88,749 102,732
========= ========= =============
Equity
Share capital 2,553 2,550 2,553
Share premium 84,612 84,612 84,612
Merger reserve (75,383) (75,383) (75,383)
Available-for-sale reserve 315 240 269
Retained earnings 100,995 76,730 90,681
Total Equity 113,092 88,749 102,732
========= ========= =============
Consolidated Statement of Changes in Equity
for the six month period ended 31 March 2017 (unaudited)
Share Share Merger Available-for-sale Retained
Capital Premium Reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
30 September
2015 1,000 6,300 - 153 105,597 113,050
Loss for the
period - - - - (13,139) (13,139)
Other comprehensive
income - - - 87 - 87
Dividend paid
prior to IPO
(note 8) - - - - (10,000) (10,000)
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
Group reconstruction
of Watkin Jones
plc and Watkin
Jones Group
Limited (1,000) (6,300) (75,383) - (173,592) (256,275)
Balance at
31 March 2016 2,550 84,612 (75,383) 240 76,730 88,749
========= ========= ========= ================== ========== =========
Profit for the
period - - - - 17,346 17,346
Dividend paid
(note 8) - - - - (3,395) (3,395)
Issue of shares
to employee
SIP 3 - - - - 3
Other comprehensive
income - - - 29 - 29
Balance at
30 September
2016 2,553 84,612 (75,383) 269 90,681 102,732
========= ========= ========= ================== ========== =========
Profit for the
period - - - - 17,130 17,130
Dividend paid
(note 8) - - - - (6,816) (6,816)
Other comprehensive
income - - - 46 - 46
Balance at
31 March 2017 2,553 84,612 (75,383) 315 100,995 113,092
========= ========= ========= ================== ========== =========
Consolidated Statement of Cash Flows
for the six month period ended 31 March 2017 (unaudited)
6 months 6 months 12 months
to to to
31 March 31 March 30 September
2017 2016 2016
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Cash (outflow)/inflow from
operations 9 (16,445) 6,907 24,457
Interest received 72 127 252
Interest paid (420) (382) (1,408)
Interest element of finance
lease rental payments (12) (12) (22)
Tax paid (3,140) (6,911) (8,152)
---------------------- ---------------------- ----------------------
Net cash (outflow)/inflow from
operating activities (19,945) (271) 15,127
====================== ====================== ======================
Cash flows from investing activities
Acquisition of property, plant
and equipment (441) (5) (150)
Proceeds on disposal of property,
plant and equipment 42 1 2,750
Acquisition of Fresh Student
Living Limited (net of cash
acquired) - (14,496) (14,496)
Proceeds from disposal of interest
in joint venture 5,510 - -
Loan repayments from joint
ventures 2,043 2,143 4,242
Purchase of other financial
assets - (1,024) (1,024)
---------------------- ---------------------- ----------------------
Net cash inflow/(outflow) from
investing activities 7,154 (13,381) (8,678)
====================== ====================== ======================
Cash flows from financing activities
Dividend paid 8 (6,816) (10,000) (13,395)
Issue of shares prior to IPO - 88,151 88,151
Issue of shares on IPO - 85,441 85,441
Cash outflow on group reconstruction
of Watkin Jones plc and Watkin
Jones Group Limited - (173,592) (173,592)
Capital element of finance
lease rental payments (233) (180) (278)
Repayment of bank loans (2,270) (2,834) (4,825)
Net cash outflow from financing
activities (9,319) (13,014) (18,498)
====================== ====================== ======================
Net decrease in cash (22,110) (26,666) (12,049)
Cash and cash equivalents at
beginning of the period 47,221 59,270 59,270
---------------------- ---------------------- ----------------------
Cash and cash equivalents at
end of the period 10 25,111 32,604 47,221
====================== ====================== ======================
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 those of property development and
the management of properties for multiple residential
occupation.
The consolidated interim financial statements of the Group for
the six month period ended 31 March 2017 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 2017
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 2016, 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 31 May 2017.
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
2017. To the extent that IFRS at 30 September 2017 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 2016. 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 2016.
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.
c. Fresh Accommodation Management - The management of purpose
built student accommodation and private rented sector property.
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.
6 months ended Student
31 March 2017 Accommodation Accommodation Residential
(unaudited) Development Management Development Corporate Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental revenue 115,158 2,964 6,269 9,285 133,676
Segmental gross
profit 25,025 1,872 1,095 1,126 29,118
Administration
expenses - - - (8,924) (8,924)
Distribution costs - - - (768) (768)
Profit on disposal
of interest in
joint venture - - - 930 930
Share of profit
in joint ventures - - - 1,119 1,119
Finance income - - - 72 72
Finance costs - - (432) (432)
--------------------- --------------- -------------- ---------- ------------
Profit/(loss)
before tax 25,025 1,872 1,095 (6,877) 21,115
Taxation - - - (4,031) (4,031)
--------------------- --------------- -------------- ---------- ------------
Profit/(loss)
for the period 25,025 1,872 1,095 (10,908) 17,084
===================== =============== ============== ========== ============
Inventory and
work in progress 46,211 - 56,529 23,300 126,040
--------------------- --------------- -------------- ---------- ------------
6 months ended Student
31 March 2016 Accommodation Accommodation Residential
(unaudited) Development Management Development Corporate Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental
revenue 122,587 407 16,398 6,496 145,888
---------------------- ------------------------------- ---------------------- ----------------------------------- ---------
Segmental gross
profit 21,971 261 1,217 80 23,529
Administration
expenses - - - (6,042) (6,042)
Distribution
costs - - - (464) (464)
Exceptional IPO
costs - - - (26,561) (26,561)
Finance income - - - 127 127
Finance costs - - - (466) (466)
---------------------- ------------------------------- ---------------------- ----------------------------------- ---------
Profit/(loss)
before tax 21,971 261 1,217 (33,326) (9,877)
Taxation - - - (3,348) (3,348)
---------------------- ------------------------------- ---------------------- ----------------------------------- ---------
Profit/(loss)
for the period 21,971 261 1,217 (36,674) (13,225)
====================== =============================== ====================== =================================== =========
Inventory and
work in
progress 25,060 - 56,618 5,303 86,981
---------------------- ------------------------------- ---------------------- ----------------------------------- ---------
Inventory and
work in
progress
- discontinued 3,041
---------
Total inventory
and work in
progress 90,022
---------
5. Disposal of interest in joint venture
On 9 December 2016 the Group disposed of its joint venture
interest in Athena Hall (Jersey) Limited, realising a profit on the
disposal of GBP930,000. The proceeds received from the disposal,
including the repayment of a loan to Athena Hall (Jersey) Limited,
amounted to GBP6,210,000, of which GBP700,000 remains owed by way
of a loan to the purchaser and is repayable within 3 years from the
date of the transaction.
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
2017 of 19.1% 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.
There is no difference between basic earnings per share and
diluted earnings per share as there are no dilutive share option
arrangements in place.
The following table reflects the income and share data used in
the basic EPS computations:
Period Period Year
ended 31 ended 31 ended 30
March March September
2017 2016 2016
GBP'000 GBP'000 GBP'000
Profit/(Loss) attributable to ordinary equity holders of the parent 17,084 (13,139) 4,207
Profit/(Loss) from continuing operations attributable to ordinary equity
holders of the parent 17,084 (13,225) 5,085
Adjusted profit from continuing operations attributable to ordinary equity
holders of the
parent (excluding exceptional IPO costs) 17,084 13,264 31,646
Weighted average number of ordinary shares for basic earnings per share 255,268,875 13,560,440 134,729,152
Pence Pence Pence
Basic earnings per share
Basic profit/(loss) for the period attributable to ordinary equity holders
of the parent 6.693 (96.892) 3.123
Basic earnings per share from continuing operations
Basic profit/(loss) for the period attributable to ordinary equity holders
of the parent 6.693 (97.526) 3.774
Adjusted basic earnings per share from continuing operations (excluding
exceptional IPO costs)
Basic profit for the period attributable to ordinary equity holders of the
parent 6.693 97.814 23.489
Using the number of shares in issue at 30 September 2016, the
adjusted proforma basic earnings per share from continuing
operations (excluding exceptional IPO costs) for the 6 months ended
31 March 2016 would have been 5.196 pence and for the year ended 30
September 2016 would have been 12.397 pence.
8. Dividends
Period Period Year
ended 31 ended 31 ended 30
March March September
2017 2016 2016
GBP'000 GBP'000 GBP'000
Dividend paid prior to IPO - 10,000 10,000
Interim dividend paid in June 2016 of 1.33
pence - - 3,395
Final dividend paid in February 2017 of 6,816 - -
2.67 pence
6,816 10,000 13,395
An interim dividend of 2.2 pence per ordinary share will be paid
on 30 June 2017. This dividend was declared after 31 March 2017 and
as such the liability of GBP5,616,000 has not been recognised at
that date.
9. Reconciliation of operating profit to net cash flows from operating activities
6 months 6 months Year
ended 31 ended 31 ended 30
March March September
2017 2016 2016
GBP'000 GBP'000 GBP'000
Profit/(loss) before tax
from continuing operations 21,115 (9,877) 13,264
Profit/(loss) before tax
from discontinued operations - 108 (1,098)
--------- --------- ----------
Profit/(loss) before tax 21,115 (9,769) 12,166
Depreciation 133 253 341
Amortisation of intangible
assets 280 47 326
(Profit)/loss on sale of
plant and equipment (26) 2 80
Issue of shares to employee
SIP and employees of Fresh
Student Living Limited - - 29
Finance income (72) (127) (252)
Finance costs 432 466 1,282
Profit on disposal of interest
in joint venture (930) - -
Share of profit in joint
ventures (1,119) - (2,972)
Decrease/(increase) in inventory
and work in progress 2,117 29,539 (8,474)
Interest capitalised in development
land, inventory and work
in progress - 122 148
(Increase)/decrease in trade
and other receivables (4,581) 1,054 5,353
(Decrease)/increase in trade
and other payables (33,794) (14,680) 16,682
Provision for property lease
commitment - - (252)
--------- --------- ----------
Net cash(outflow)/ inflow
from operating activities (16,445) 6,907 24,457
--------- --------- ----------
10. Analysis of net cash
6 months 6 months 12 months
ended 31 ended 31 ended 30
March 2017 March 2016 September 2016
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 25,111 32,604 47,221
Finance leases (955) (358) (260)
Bank loans (12,483) (16,883) (14,753)
Net cash 11,673 15,363 32,208
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKDDKKBKBKPN
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