Watkin Jones Share Discussion Threads

[alter ego] 23/1/2017 17:52

Apeman, the IHT aspect is relevant since WJG being on AIM, and a proper trading company, means shareholdings are exempt from IHT when held for 2 years or more. As such, it is not in the interests of shareholders to move off AIM.

I'll be happy to see steady growth and retain my IHT exemption too.

[jonwig] 23/1/2017 17:40

apeman - well, I think I'll still be holding when the kerr-ching! moment comes.

[return_of_the_apeman] 23/1/2017 17:18

Hi Jonwig,

All good points as usual

I expect pre-tax profits to beat expectations as the vast majority of this years forecast is already accounted for. Yes to an increase in turnover and yes to an increase in workforce, but only a small increase to those that manage rather than those that build. Skills shortage is not cited by them as a key challenge at the moment, I expect this to not dampen the directors drive to further growth.

PER is far too low for what is a quality outfit, the more they continue to deliver the quicker this will re-rate.

I also expect fund managers to buy this and a good solid base of long term pi holders, I am surprised more FMs are not in.

My reasoning is simple, this company clearly has a straightforward strategy with the expertise to deliver. Projects are completed on schedule and there is momentum and a culture of over delivering on everything else.

I assumed the reason a trust was set up was to combat IHT? Thanks for pointing me back to the prospectus, I will take a look. I believe there are many examples of companies moving from AIM to the FTSE250

Just my thoughts

[jonwig] 23/1/2017 16:22

apeman - so you want a 33% pa growth in MCap. Pre-tax profits are expected to grow at ~10% pa, eps maybe a bit more if the tax rate falls. Presumably you want an increase in turnover to deliver the result. So an increase in workforce. Trouble is, there's already a skills shortage in construction, and we have to assume EU migration will slow or even reverse. [She means it, you know!]

Alternatively, growth will be nearer current consensus and the PER will be around 20x.

[By the way, an AIM stock can't be in the FTSE250, and I think the bosses are using AIM for IHT exemption. There's a section in the prospectus.]

[return_of_the_apeman] 23/1/2017 16:06

Get ready for another record year. I'm gonna stick my neck out and say the market cap will be over £800m within 3yrs at which point this will be in the ftse250

Strategy

Watkin Jones’s core strategy is to continue to be one of the leading developers of student accommodation in the UK, primarily using its forward sale model to minimise risk, and taking advantage of attractive market dynamics to increase both revenues and profitability on a sustainable basis.
The Directors also intend to expand the Group’s business into PRS to capitalise on the similarities of this business with its core student accommodation expertise, engaging its existing relationships with institutional investors to forward fund these projects and minimise development risk to Watkin Jones.
By using the experienced residential division teams, the Group can utilise their expertise in residential development without moving resource away from student accommodation development.
In addition, the Group will continue to expand its management division in student accommodation, particularly focussing on developments already in existence. The Group will also focus on rolling out the PRS management offering for its existing and new clients using a similar model to that already followed on student accommodation.
The Directors also intend to develop out the remaining residential land bank as well as strategically acquiring new sites for residential development if and when they become available.

[spellbrook] 23/1/2017 15:25

Watkin Jones support a few charities...............

Watkin Jones Group added 2 new photos.
8 mins ·
Today we were delighted to present a cheque to the Mon & Arfon Stroke Club for £520.00.
They will use this donation to pay for a Red Cross accessible minibus to transport Stroke survivors to and from the club on a monthly basis.
Below the Chairperson Gwenda Williams is receiving the cheque from Barry Palmer and Leon Thomas from our team in Bangor.

[alan@bj] 23/1/2017 14:39

Your second paragraph is spot on, Paleje.

[paleje] 23/1/2017 12:17

ST upped his target today:-

"So, given the company's robust pipeline, the significant de-risking of earnings, and prospects for a progressive dividend policy being adopted, I feel that my previous target price of 140p is too conservative and have raised it to 155p, in-line with analyst Gavin Jago at broking house Peel Hunt, but slightly below the 160p target of Mr Hanson at Zeus Capital. Buy."

I think splitting hairs over target numbers is nonsense, the main thing here is good management and a good business model with some diversification going forward. Targets should continue to re-rate as management deliver imo.

[spellbrook] 22/1/2017 16:59

PRS.


hxxp://www.fivenineliving.co.uk/

[rivaldo] 22/1/2017 10:16

Yep, ex-div on Thursday for the 2.67p dividend.

Cheers re the FT article - all publicity welcome in spreading the word. Good to see Peel Hunt's forecast is close to Zeus's at 13.4p and 13.7p EPS respectively (with 6.28p and 6.3p dividends).

[spellbrook] 22/1/2017 10:11

Will we see some buying for the dividend this week.???

[spellbrook] 21/1/2017 07:51

Buy Watkin Jones

[brentpease] 19/1/2017 21:52

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."

[spellbrook] 19/1/2017 21:25

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 ...

[spellbrook] 19/1/2017 17:46

Several large 70,000 BUYS today

[paleje] 19/1/2017 17:10

Peter, 561

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:)

[greyingsurfer] 19/1/2017 16:40

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.

Peter

[spellbrook] 19/1/2017 16:39

Decent volume today....

A few more will chase the Dividend imo...

[jl9] 19/1/2017 16:32

Too many brain surgeons with unpronounceable names. Twinkletoes is on it!

[bestace] 19/1/2017 16:16

Don't take me literally, I was being flippant!

Student numbers from China have been increasing for years, India not so much:

hxxps://www.hesa.ac.uk/data-and-analysis/students/international-study

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:

hxxps://www.hesa.ac.uk/data-and-analysis/students

[bestace] 19/1/2017 16:02

I wonder how British universities managed to cope for the hundreds of years they existed before the EU came into being.

[shaker44] 19/1/2017 15:34

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.

[paleje] 19/1/2017 14:35

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.

[greyingsurfer] 19/1/2017 13:17

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.

Peter