IPO costs well worth it as developer celebrates £54m profits

Developer and constructor Watkin Jones is celebrating outstanding full year results thanks to a £15.3m reinvestment into the company by its management team following its IPO in March last year.

In its first year as an AIM-listed company pre-tax profits hit £53.8m – an increase of more than 22%.

The IPO cost the company a total of £26.6m – £6.5m for the AIM admission and £20.1m in settlement of senior management incentive plans.

However, the management team ploughed £15.3m of that cash back into the Bangor-based company with offices in Runcorn in shares.

Operating profit before exceptional (IPO) costs £37.9m – up 16% – and turnover topped £267m, a rise of 9.3% in the year to September, 2016.

Chief executive Mark Watkin Jones told TheBusinessDesk the company’s performance since the IPO in March 2016 had shown going public had been “the right way to go”.

“There were costs of £20.1m in management incentives, but they invested £15.3m back into the business in shares,” he said. “It has increased our profitability and a aligned us with the right companies to work with.

He went on: “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 10 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.”