Watkin Jones plc - Pre-Close and COVID-19 Update
For immediate release
('Watkin Jones' or the 'Group')
Pre-Close and COVID-19 Update
'Resilient business responding to the unprecedented challenge of COVID-19'
Pre-Close update for the six months ended
The Group's trading remained strong through the first half of the year. All business segments performed well, delivering on their operational objectives, with the disruption caused by COVID-19 only starting to have an effect on our operations towards the end of
Continued progress was made during the period in growing the pipeline of sites for future development and in achieving forward sales of assets to the Group's high-quality institutional client base, including:
· Forward sale of a 348 bed PBSA scheme at
· Agreement, with planning consent, to increase the forward sold PBSA development at Kelaty House, Wembley by 100 beds;
· Secured two further PBSA sites in
· Secured two further significant BtR sites in
Including these additions, the Group's forward sold and secured PBSA development pipeline comprises over 7,000 beds, across 19 sites, with 12 sites (4,985 beds) forward sold. On the same basis, the Group's BtR pipeline stands at over 2,600 apartments, across 10 sites, with five developments (1,012 apartments) forward sold. The Group has a number of additional opportunities, in both sectors, which provide scope to further expand the development pipeline.
The performance in the first half reflects the continued strength of demand during the period for well-located assets in the Group's target cities and the recognition of Watkin Jones as a preferred development partner.
The impact of COVID-19
As announced on 27 March, we have begun to experience significant disruption to our operations as a result of the COVID-19 outbreak. Our non-site based staff are currently working from home, in line with our established Business Continuity Plan, and we have halted all non-essential work on our construction sites. This will inevitably impact financial performance, whilst these measures are in place. We have a strong forward sold delivery pipeline for delivery over the next two years. However, it is difficult to predict the scale of adverse impacts caused by further disruption to our operations, or to forward sale markets, at this time. The Board therefore believes that it is appropriate to withdraw financial guidance at the current time, with the intention to reinstate it as soon as the backdrop becomes more stable.
Notwithstanding the challenging current backdrop, the Board believes that the long-term outlook for both the student accommodation and BtR sectors remains strong. These markets are underpinned by robust fundamental growth drivers, which will continue to appeal to institutional investors. The Group is confident of further enhancing its position as a market leader over time.
Watkin Jones has entered this unprecedented period of market uncertainty well positioned, with a 'capital light' business model. The Group has forward sold all of its 2020 developments and eight out of ten of its developments scheduled for delivery in 2021 to institutional partners, which provides cashflow and earnings visibility. At
Whilst the Group has a resilient financial position, the Board believes it is prudent to adopt a cautious approach to new investment, as well as to introduce measures to manage costs and conserve cash, until the extent and duration of the disruption caused by COVID-19 is better understood. The Board therefore does not intend to declare an interim dividend alongside its results for the six months to
In our FY19 full year results announcement on
Whilst discussions with certain property owners remain ongoing, the Board currently expects that this will result in a sharing of the initial costs of any remedial works with them. The gross cost to the Group is currently expected to be in the range of
Notice of Interim Results
The Group will make a further announcement in due course regarding the timing of its Interim Results.
- Ends -
The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via
For further information:
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Tel: +44 (0) 1248 362 516
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Tel: +44 (0) 20 7418 8900
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Tel: +44 (0) 20 7029 8000
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Tel: +44 (0) 20 7466 5000
Notes to Editors
Watkin Jones is the
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
This information is provided by RNS, the news service of the
Quick facts: Watkin Jones
Market Cap: £394.32 m
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