|Student property specialist Watkin Jones has reported growth in turnover and earnings in its first full-year results since its AIM flotation.
The Bangor-headquartered developer floated in March 2016 with a market capitalisation of £255m, raising £131.3m.
Full-year results for the year to 30 September 2016 show turnover of £267m, up from £244.2m the previous year.
Adjusted earnings (EBITDA), before exceptional costs associated with the initial public offering (IPO) grew to £41.6m from £34.1m. Exceptional costs of £26.6m were incurred in relation to the IPO.
Mark Watkin Jones, chief executive 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.
"By utilising positive market conditions and choosing only the best opportunities, we expect to make further progress in our student accommodation businesses."
During the year, Watkin Jones forward sold eight student accommodation schemes, comprising 2,615 beds, with a combined value of £183m.
A further £164m-wrth of development has been forward sold since e end of the year, comprising five schemes and 1,893 beds.
Planning permissions for ten student developments, comprising 3,500 beds, was secured during the year with a further four schemes and 1,579 beds following the end of the period.
Watkin Jones' pipeline of student accommodation development currently comprises 9,469 beds across 27 sites, with 15 forward sold and seven more forward sales in legal negotiations.
The company's student accommodation asset management business Fresh Student Living is contracted to manage 12,337 beds across 44 schemes in 2017. The group is also planning further developments in the private rented sector (PRS).
Mark Watkin Jones added: "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."|
|Some of its 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 Watkin Jones' largest ever project.
This is a large site and Watkin Jones have residential units to sell ...|
|Several large 70,000 BUYS today|
True she did but she's pragmatic, that's clear from the way she's tackling brexit when she wasn't really a committed brexiteer. There's an agenda we're not aware of and this isn't the place to speculate but, at the end of the day, she's probably going to have to rip up years of 'how we do things' and think fresh and I don't think anything would be off the table.
It will be a case of necessity imo. And actually, the uni's would be better off taking more rest of world students because they charge them more.
...and they definitely need accommodation:)|
|so why not make student visas easier for rest of world and fill the gap if one comes about.
Why not indeed? However, out current PM was the one who made them more difficult to get when Home Sec. So I have little hope for sanity winning out on this issue.
|Decent volume today....
A few more will chase the Dividend imo...|
|Too many brain surgeons with unpronounceable names. Twinkletoes is on it!|
|Don't take me literally, I was being flippant!
Student numbers from China have been increasing for years, India not so much:
I reckon it's mostly swings and roundabouts. In total, international students account for less than 20% of the wider student body and I reckon a more important driver of demand as far as WJG are concerned is the low take up of PBSA as a percentage of student accommodation as a whole, as per the bottom chart here:
|I wonder how British universities managed to cope for the hundreds of years they existed before the EU came into being.|
|I quite agree Paleje. I spend a lot of time in South East Asia and there is huge demand for UK higher education. Also today Brits study in Barcelona, Madrid, Seville, and a variety of EU Uni's. If the game rules change because the EU throw their toys out of the pram, I suspect that student accommodation changes will be a zero sum game. I dont see any negative impact on WJG, personally.|
|I can see your point, greyingsurfer, but we don't know what future arrangements will be made for study. For certain our uni's won't want to lose out they need the income. I don't know what the numbers are for EU students vs rest of world but I do know from a partner I have at Dalian University in China, who has been involved in multinational student study schemes for the last 20 yrs, that demand is very strong for UK uni places and continually exceeds supply so why not make student visas easier for rest of world and fill the gap if one comes about.
May is talking about breaking norms, reaching out to rest of world, she will need to come up with solutions or lose her job imo, now that she has set a course.|
|Not sure if the worry over students abandoning the UK is justified, personally I can't see that happening
I can't see why it won't happen.
Currently EU students are eligible for UK student loans and grants and pay home student fees. Post Brexit they must surely revert to being "international students", and paying higher fees and not being eligible for funding. Coming to the UK as an EU student will become a great deal less attractive. They will also presumably be counted, as non EU students currently are, in immigration figures, and the govt is keen to keep those figures as low as possible.
|Not sure if the worry over students abandoning the UK is justified, personally I can't see that happening. IC (not Simon Thompson, who may yet update as he has been a follower) retained their buy advice yesterday, can't paste the whole so soon but their conclusion:-
"The business model is capital light because the whole process from land procurement to construction is forward funded by the end user, reducing risk. The shares are up from our buy tip (107p, 7 Jul 2016) and we see further growth. Buy."|
|will the dividends get re invested ????|
|Try this - Watkin Jones (LON:WJG, 129.50p) – Speculative Buy|
|Here is a link to the Beaufort Securities analysis:
|Beaufort Securities have a 190p target....
"Our view: An excellent business model delivering strong maiden results. Confidence is underscored by an exceptional pipeline while delivering gross margins for the year on student accommodation developments of 20.5%, compared to 18.2% for FY 2015. This improvement reflects both the move to sole development of own projects and away from lower margin contracting work for other developers.
The Group's 'forward sale' model means that FY 2017 will also benefit from progress on schemes delivering in later years, including the eleven that look to complete in FY 2018, of which ten have planning consents while planning has been submitted on the remaining one.
Some of its 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 Watkin Jones' largest ever project.
Investment interest in this asset class remains strong while offering good medium-term visibility. Growth in the student accommodation management business 'Fresh' also continues, with 44 schemes under management and 61 already contracted for 2020.
While there appears no need for Beaufort to adjust its current forecasts for either 2017E or 2018E, the shares still appear to be undervalued on the basis of earnings multiples of 9.3x and 8.6x for the two years, a dividend yield of 5% along with exceptional FCF yield of 13.3%. At this time, Beaufort does not take some media suggestions that the decision to leave the EU could result in international students deserting the UK in coming years, but recognises this concern will need to be dispelled before its price target of 190p/share for Watkin Jones can be achieved."|
|IC comment on results (nothing new to say) and tip update:
The business model is capital light because the whole process from land procurement to construction is forward funded by the end user, reducing risk. The shares are up from our buy tip (107p, 7 Jul 2016) and we see further growth. Buy.|
|An enjoyable read over breakfast yesterday morning, promoting me to add twice at the open....legalised theft lol.Many thanks once again Jeff H.|
|In terms of what the company jet stands for a small prop propelled plane has on many occasions been compared to an "hot air balloon" regarding its standing in the aviation fraternity
|I don't know why some are obsessing about the company jet. With such a geographical spread I think it makes sense to have one. What do you expect them to do, travel by hot air balloon?|
|'We said we would deliver and we have'...Mark Watkin Jones on record profits for developer
|Brief interview with the CEO....
|sold its light aircraft during the year So not sold "the jets" then :-)|