Maiden interims shine for AIM newbie
WATKIN Jones has seen first half turnover increase more than 40% to close to £150m, it announced today in it’s maiden stock market interim annoucement.
The Bangor-headquartered developer, which also has an office in Runcorn, focuses on the student accommodation sector.
It successfully raised £131.3m before expenses by listing on AIM in March, giving it a market capitalisation of £255m on admission and making it the largest AIM initial public offering in the North West since boohoo.com two years ago.
It had a turnover of £145.9m for the half year to the end of March 2016 (2015: £103.8m) with operational profit, before exceptional IPO costs, of £17.3m (2015: £9.3m).
An overall pre-tax loss was registered of £9.9m (2015: £9m profit) but after stripping out those one-off IPO costs the company showed a half year pre-tax profit of £16.7m.
Revenues from student accommodation development for the period amounted to £122.6m of the total and the strong results were driven by an underlying increase in the value of student accommodation projects in development.
Mark Watkin Jones, chief executive of Watkin Jones, said: “Our student accommodation development business remains positively underpinned by the fundamentals of the student accommodation market and the forward sale model provides us with excellent visibility as to future earnings and cash flow.”
The company is in the advanced stages of acquiring a number of student accomodations for delivery in 2019 and beyond.
Group revenues also benefitted from higher sales of residential properties and from the sale of commercial property that was in inventory at the start of the period.
Although the residential division is much smaller – generating £16.4m of total reveues in the half year – Watkin Jones sees an oppotunity to apply its student accommodation model to the development and management of purpose built private rented sector (PRS) schemes and is in negotiations over a number of PRS opportunities.
The company has also agreed an as yet unused £40m five year revolving credit facility and £10m working capital facility with HSBC, which was put in place at IPO to provide development funding flexibility and working capital headroom.
Jones said: “The strong set of results for the first six months of the year, coupled with the status of the forward sold student accommodation pipeline and the fact that all developments for this year’s delivery are progressing satisfactorily, provide the Board with confidence for the Group’s performance going forward.”
