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Watkin Jones Share Discussion Threads
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|340 student accomodation with its own alcohol treatment centre!!!|
|Mark Watkin Jones named Business Person of the Year at celebration of North Wales success
|Zeus Capital said:
We note Watkin Jones’ announcement today confirming that the company has forward sold another two developments, in Cardiff and Belfast, to institutional investors. We leave forecasts unchanged but acknowledge that these further sales increase the visibility on earnings. We now assume c.65% of FY17 gross profit is derived from projects that have been forward sold. We continue to believe the shares are undervalued given the high levels of earnings visibility that the forward sales model generates, the low leverage risk with in excess of £30m of net cash and the structural growth in both Purpose Built Student Accommodation (PBSA) and the Private Rented Sector (PRS). On FY16 earnings, which the company confirmed are in line in its recent trading update (17th November), the shares trade on 9.6x. This falls to just 8.7x in FY17 with c.65% visibility after just two months of the financial year. We would hope that almost all of FY17 earnings will have been forward sold by the half year end mirroring the experience in FY16. The prospective yield of 5.3%, twice covered by earnings and underpinned by a strong balance sheet, remains attractive.
* Successful forward sale of two developments: The two forward sold developments announced this morning in Cardiff and Belfast total a combined 812 beds. Both are due for completion in FY18 ahead of the 2018/19 academic year. The Cardiff development is a 472 bed scheme located in a prominent location in Cardiff City Centre, close to Cardiff Queen Street Station. The Belfast development is located in Belfast City Centre directly opposite John Bell House that was completed by Watkin Jones this year. The development is for 340 beds.
* Continued execution of the strategy underpins forecast certainty: At the time of the IPO (March 23rd), forecasts assumed c.55% of gross profit in FY17 was derived from forward sold projects. The successful forward sale of the Cardiff and Belfast developments announced today combined with the announcement (4th October) of the forward sale of the St. Mungo development in Glasgow increases the percentage of forecast FY17 gross profit from forward sold projects to c.65% after just two months of the new financial year. We expect further announcements over the coming weeks and hope that by the half year end in March a high proportion (+90%) of FY17 gross profit will be derived from forward sold projects. This will have the benefit of materially increasing forecast visibility into FY18 and beyond.
* Valuation not reflective of forecast certainty: The shares trade on an attractive PER of just 9.6x falling to 8.7x in FY17 and offering a prospective 5.3% yield on a balance sheet with estimated net cash of over £30m. We expect the shares to re-rate as the company creates a track record of delivering on forecasts. A 12x PER multiple on FY17 earnings would equate to c. 160p, offering c.34% upside.|
|Hi Spellbrook,Many thanks for your pasted postings of WJG coverage, there's a lot to like here going forward.Cheers, tightfist|
|01 December 2016
For immediate release 1 December 2016
Watkin Jones plc
('Watkin Jones' or the 'Group')
Cardiff and Belfast developments forward sold
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 today that it has forward sold another two of its developments to two institutional investors, both for undisclosed fees. The first development is situated on Bridge Street in Cardiff and the other is situated on Queen Street in Belfast.
The Cardiff development occupies a prominent position in Cardiff City Centre, and is located close to Cardiff Queen Street station. The 472 bed scheme is due for delivery in August 2018, ahead of the 2018-19 academic year. The Belfast development also occupies a prominent position in Belfast City Centre directly opposite John Bell House that was completed by Watkin Jones in August this year. This 340 bed scheme is also due for delivery in August 2018, ahead of the 2018-19 academic year.
Mark Watkin Jones, Chief Executive Officer of Watkin Jones plc, said: "We are delighted to announce today that we have forward sold our developments in Cardiff and Belfast to two institutional investors in purpose built student accommodation, which further underpins the visibility of our earnings and cashflow. The interest in the sector remains strong."|
|As such, we have invested in stocks exposed to the 4H’s of Hinkley, Heathrow, Highways and Housing, via stocks including Watkin Jones (the constructor of student and private rental accommodation) and Costain (a UK-focused construction firm).
I think IC will be covering these in the next few days so their update might be interesting.|
|Sheffield city centre flats block approved despite university's concerns
Read more at: hxxp://www.thestar.co.uk/business/sheffield-city-centre-flats-block-approved-despite-university-s-concerns-1-8259662|
|Decision due on 550-bed Sheffield city centre student flat block
|Edit - posted above.|
|Comment by Beaufort on yesterdays TS -
While this excellent progress does not come as a great surprise, it conveniently reminded us that Watkin Jones' management is operating the right business model at the right time. The alternative asset class of Privately Built Student Accommodation offers both excellent cash flow visibility and highly stable property-sector yields from operations that tend to be well insulated from underlying economic activity. As such, it is able to pre-sell and forward-fund its projects through a long list of hungry institutional buyers – like M&G, L&G, AIG etc. - creating an ideal high return, high visibility, capital light model that is almost unique in the world of residential development. With just 6% of the UK's total full-time student population currently occupying PBSA (Purpose Built Student Accommodation), at a time when government legislation is limiting HMO (House in Multiple Occupation) supply and introducing higher stamp duty on buy-to-let property, the sector is expected to enjoy quite significant growth for years to come while capital growth continues to sharpen returns. Significant demand headroom in all regions, suggests little or no impact should Brexit manage to dissuade some EU students from seeking UK educations. The shares have performed reasonably well since IPO, but there is still more to go for. The Group is set to deliver double digit earnings growth (implying a 2016E P/E of 8.9x, followed by 7.9x) for the next several years, with tightly controlled operating costs combined with a generous progressive dividend. With significant net cash still in hand following the IPO, management remains confident enough to project a yield to September 2016 of over 4% (based on second-half payment only), followed by 6.2% for full year 2016/17; beyond this, surplus generation could also find its way into shareholder's pockets through specials as well. Beaufort sees good value in Watkin Jones and now raises its price target to 148p (125p previously) on the shares, which it recommends to both income and growth investors.
Link -> hTTp://www.proactiveinvestors.co.uk/columns/beaufort-securities/26552/beaufort-securities-breakfast-alert-crh-kier-group-royal-mail-watkin-jones-26552.html|
|Peel Hunt Buy 120.00 130.00 140.00 Reiterates|
|And all in only 3 days?|
|Shanklin - in 27 Sep they did flag another 418 beds currently being acquired for 2018 (in adition to the 6317). Today's update adds another 79 beds to that.|
|FWLIW, in today's RNS, WJG report the addition of 497 beds to the pipeline reported in the update of 27-Sep-16
- 21 developments, 6814 beds as of 30-Sep-16
- 19 developments, 6317 beds as of 27-Sep-16
I wonder what the number is now.|
|Can't see the problem. Developments completed on time, excellent future pipeline of projects, good earnings visibility, progress at Fresh Living. No negative connotations. What's not to like?|
|I confess I am a bit disappointed by the lack of information. At the same time as Shankliin says, they are new to this and the message is that "we are on track for this year and (probably) next"|
|Shanklin, fair point. Anyway, these seem to be the NOMAD expectations:
2016-09-30 Revenue: £270.70m, PBT £39.50m, eps 12.40p, div 4.00p|
Their expectations are not going to be lower than market expectations so that is slightly unfair. Also at this stage, WJG are probably blindly following their NOMAD's guidance as to what they can put in an RNS, so I would associate any black mark with them rather than WJG.
Usual gripe: The Board expects to report a successful financial year with trading in line with its expectations
But we don't know what those expectations were, so that's a rather empty remark!|
|Thank you rota|
It is in the link you provided, just click on the calendar icon thingy|