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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Watkin Jones Plc | LSE:WJG | London | Ordinary Share | GB00BD6RF223 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.50 | 3.17% | 48.85 | 48.40 | 48.85 | 48.85 | 46.90 | 48.85 | 526,644 | 16:29:56 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Operative Builders | 413.24M | -32.55M | -0.1269 | -3.85 | 125.27M |
From May 2019 to May 2024
TIDMWJG
RNS Number : 4074U
Watkin Jones plc
18 January 2017
For immediate release 18 January 2017
This announcement contains inside information
Watkin Jones plc
('Watkin Jones' or the 'Group')
Full year results for the year ended 30 September 2016
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 its maiden annual results for the year ended 30 September 2016. The Board is pleased to report a successful financial year with trading in line with its expectations.
Financial Highlights
Hot Features
Premium
FY 2016 FY 2015 Movement
Revenue from
continuing operations GBP267.0 million GBP244.2 million +9.3%
Gross profit
from continuing
operations GBP53.8 million GBP44.0 million +22.2%
Operating profit
before exceptional
IPO costs(1) GBP37.9 million GBP32.5 million +16.7%
Adjusted EBITDA(2) GBP41.6 million GBP34.1 million +22.1%
Operating cash
inflow before
exceptional
IPO costs(1) GBP41.7 million GBP28.4 million +46.8%
Net cash GBP32.2 million GBP39.1 million -17.6%
Adjusted basic
EPS(3) 12.4 pence 10.4 pence +18.9%
Dividend per 4.0 pence n/a
share
Notes
1 Exceptional IPO costs of GBP26.6 million comprise GBP6.5 million costs associated with the Company's admission to AIM and GBP20.1 million relating to the settlement of senior management incentive plans
2 Adjusted EBITDA comprises operating profit from continuing operations before exceptional IPO costs, plus the Group's share of profit from joint ventures, adding back charges for depreciation and amortisation.
3 Adjusted basic EPS is calculated on a proforma basis using the profit for the period from continuing operations excluding exceptional IPO costs and based on the number of shares in issue at 30 September 2016.
-- Strong revenue growth and record operating profit, before exceptional IPO costs, driven by student accommodation developments
-- 2.67 pence per share proposed final dividend, giving total dividend of 4.0 pence per share, in line with IPO guidance
-- Robust cash performance, with a net cash inflow from operating activities before exceptional IPO costs of GBP41.7 million (2015: GBP28.4 million)
-- GBP32.2 million of net cash at the year end (30 September 2015: GBP39.1 million), after exceptional IPO cash costs of GBP26.6 million, GBP14.5 million cash cost of acquiring Fresh Student Living ("Fresh") and GBP10.0 million dividend to existing shareholders prior to IPO
-- New GBP40.0 million five-year revolving credit facility and GBP10.0 million working capital facility with HSBC, to provide development funding flexibility and working capital headroom. All these facilities were unutilised at 30 September 2016
Business Highlights
AIM listing and corporate governance
-- Successful admission to AIM listing on 23 March 2016, with business delivering strong operational performance throughout the process and since admission
-- Watkin Jones plc Board formally established ahead of IPO, comprising Grenville Turner (Chairman), Simon Laffin (Non-Executive Director), Mark Watkin Jones (CEO) and Philip Byrom (CFO)
Student accommodation development - sales and planning
-- GBP183.0 million of development value of eight student accommodation schemes (2,615 beds), forward sold during the year
-- GBP164.0 million of development value of five student accommodation schemes (1,893 beds) forward sold since the year end
-- In excess of GBP185.0 million of development value in legal negotiations, for forward sale of seven further student accommodation developments (2,166 beds)
-- Planning permissions for ten student developments (3,500 beds) granted during the year and a further four (1,579 beds) granted between the year end and the date of this announcement
-- Planning permission consented for 8,260 beds of the pipeline as at the date of this announcement.
Student accommodation development - pipeline
-- 9,469 student beds in the pipeline across 27 sites, with 15 forward sold and seven more forward
sales in legal negotiations
-- 2017 deliveries - nine student developments (2,860 beds) sold, including one operational asset (590 beds). The remaining 2017 delivery (454 beds) in legal negotiations
-- 2018 deliveries - eleven student developments (3,485 beds) scheduled for delivery, of which ten developments (3,370 beds) have planning and five developments (1,840 beds) are forward sold
-- 2019/20 deliveries - six sites secured and a number of additional site acquisitions progressing satisfactorily. One development (511 beds) forward sold to date
Student accommodation asset management
-- Fresh successfully integrated, with beds under management increased from 8,310 in FY 2016 to 12,337 in FY 2017, and currently contracted to increase to 18,636 by FY 2020
Private rented sector ("PRS")
-- Five Nine Living Limited established to leverage Fresh's property management expertise in PRS and
focus applied to sourcing suitable PRS development opportunities
Private residential
-- 127 residential plot sales achieved from the ongoing development of legacy sites
Commenting on the results, Mark Watkin Jones, Chief Executive Officer 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. We currently have a development pipeline of 9,469 beds across 27 sites, where we have planning permissions granted for 8,260 beds. Nine of the ten schemes scheduled for completion in FY 2017 have been successfully forward sold and the tenth scheme is in legal negotiations. All schemes are progressing well on site.
At 30 September 2016, Fresh Student Living, our specialist student accommodation asset management business, was contracted to manage 12,337 beds across 44 schemes.
By utilising positive market conditions and choosing only the best opportunities, we expect to make further progress in our student accommodation businesses.
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.
Watkin Jones has made a strong start to life as a public company and has demonstrated its ability to grow with good visibility of earnings and significant cash generation. Our prospects are encouraging and our aspiration is to continue to expand in both student accommodation and PRS, while adding to earnings by managing the completed developments. We look forward to the next year with confidence."
CHAIRMAN'S STATEMENT
Performance and dividend
This is our first annual report since our admission to AIM in March 2016 and I am pleased with the progress the Group has made, both commercially and with organising ourselves as a public company. We had a very good first trading period and we met our expectations for the year. Any uncertainty in our markets in the immediate aftermath of the EU Referendum result dissipated quickly. University places remain oversubscribed and as only 7% of students in the UK come from the EU across the higher education sector, we do not believe that Brexit will be a significant issue for the Group.
One of the key attractions of the business is its strong cash generation, which results from the forward sale model. This cash generation underpins our ability to reward shareholders through dividends.
Having paid an interim dividend of 1.33 pence per share in June, the Board has recommended a final dividend of 2.67 pence per share, giving a total dividend of 4.0 pence per share. With admission having taken place towards the end of the first half of the financial year, this total dividend represents two thirds of the full year equivalent, giving an initial yield of 6% based on the placing price of GBP1 per ordinary share. This is in line with our stated intention at the time of the IPO. The dividend will be paid on 28 February 2017 to shareholders on the register at close of business on 27 January 2017. The shares will go ex-dividend on 26 January 2017.
Looking forward, our intention is to adopt a progressive dividend policy, which will allow shareholders to benefit from the Group's growth in earnings and cash flow.
Board and management
I joined the Board as Non-Executive Chairman ahead of the IPO, along with Simon Laffin, who was appointed as a Non-Executive Director and as chairman of the Audit Committee. The Board has four Directors in total, including Mark Watkin Jones (CEO) and Philip Byrom (CFO). Since the Board was formed, we have focused on defining our activities, agreeing roles and responsibilities, and setting out the processes and authorities that will govern our work.
Simon and I have also spent considerable time getting to know the business and the team. Watkin Jones has excellent people, with real depth of talent. One of the business's key strengths is the commitment of its employees, many of whom have worked for the Group for their entire careers. Retaining their experience and bringing them through the business has been an important factor in Watkin Jones' growth. Having the right culture is critical for sustainable success. The Board recognises its role in setting the Group's culture and for making sure that it is appropriate for the business and what it wants to achieve. That includes ensuring we challenge appropriately and encourage the business to look for opportunities to improve and do things differently.
Looking forward
Watkin Jones has made a positive start to life as a public company and has demonstrated its ability to grow. Our prospects are encouraging and our aspiration is to continue to expand in both student accommodation and PRS, while adding to earnings by managing the completed developments.
Grenville Turner
Independent Non-Executive Chairman
17 January 2017
CHIEF EXECUTIVE OFFICER'S REVIEW
Performance
We delivered a strong performance across the Group this year. Revenue from continuing operations rose from GBP244.2 million in FY 2015 to GBP267.0 million in FY 2016, an increase of 9.3%, whilst gross profit rose from GBP44.0 million in FY 2015 to GBP53.8 million in FY 2016, an increase of 22.2%. Operating profit before exceptional IPO costs was 16.7% higher at GBP37.9 million (FY 2015: GBP32.5 million), representing a margin of 14.2% (FY 2015: 13.3%). One of the key features of our model is its strong cash generation and we achieved an operating cash inflow, before exceptional IPO costs, of GBP41.7 million (FY 2015: GBP28.4 million).
Developing student accommodation is our largest business and we continued to perform well. We completed ten schemes with 3,819 beds during FY 2016 and maintained our 100% record of finishing ahead of the academic year. The Group acquired the student accommodation management business, Fresh Student Living, in February 2016. Fresh has continued to grow strongly and now has 12,337 beds under management for FY 2017, compared to 8,310 beds in FY 2016, and is currently contracted to manage 16,431 for FY 2018.
A key event in the financial year was the progression of our first PRS scheme, a 322--apartment development in Leeds, which we have forward sold to a leading institutional investor. Construction is proceeding to plan, with completion scheduled in the first half of FY 2017. We also launched Five Nine Living to manage PRS schemes, drawing on Fresh's expertise.
Private residential sales were strong during the year, with 127 sales completed against 69 in FY 2015. We made good progress with releasing cash from low-margin legacy sites.
Operating review
Student Accommodation development
The gross margin for the year on student accommodation developments was 20.5%, compared to 18.2% for FY 2015. The improvement reflects our move to solely developing our own projects and away from lower margin contracting work for other developers.
The student accommodation pipeline remains robust. Nine of the ten schemes scheduled for completion in FY 2017 have been forward sold with the remaining 2017 delivery in legal negotiation. We have secured all our development sites for FY 2018. Ten of these have planning consent and the remaining one is progressing satisfactorily through the planning process. We have secured six developments for FY 2019. Two of these have planning consent with the remainder progressing satisfactorily. A number of other sites are under offer, with a view to further building up the secured pipeline for FY 2019.
In total, we currently have 27 development sites under offer and in the pipeline, representing 9,469 beds and with an appraised development value of approximately GBP800.0 million. Of these, 3,314 are for delivery by FY 2017, 3,485 are for delivery by FY 2018 and 2,670 are for delivery in FY 2019 and beyond.
During the year, we forward sold eight development sites with 2,615 beds.
At the date of this announcement, seven developments were in legal negotiations (2,166 beds), with a total development value in excess of GBP185.0 million.
We remained successful in securing planning consents, achieving ten during FY 2016 (3,500 beds) and a further four (1,579 beds) between the year end and the date of this announcement.
Our development sites are spread across the UK and we organise the operating divisions responsible for building the schemes on this basis. Negotiating national procurement terms with key subcontractors and standardising development layouts is continuing to help us control build costs.
Fresh Student Living
We acquired Fresh on 25 February 2016 and have successfully integrated it into the Group. Fresh requires little working capital and the consideration of GBP15.0 million was largely attributable to the value of intangible assets.
Fresh provides student letting and operational management services for a variety of clients. Contracts typically run for between three and seven years and our expectation is for these contracts to be renewed. Fresh also provides consultancy and mobilisation services to clients for new schemes in development. This is a key part of the complete solution we offer to clients.
At 30 September 2016, Fresh was contracted to manage 12,337 beds across 44 schemes, with an annual management fee income of GBP3.6 million. By FY 2020, Fresh is currently contracted to manage 18,636 beds across 61 schemes. The majority of the increase to FY 2020 is through contracts with third parties. We do not include our own development schemes in Fresh's pipeline until the exit strategy for a particular site is determined and we are certain that Fresh will manage it.
For the period post--acquisition, Fresh contributed revenue of GBP2.8 million and gross profit of GBP1.7 million. On a like--for--like basis, Fresh's revenues for the year to 30 September 2016 amounted to GBP5.1 million, compared to GBP2.6 million for FY 2015. The gross margin achieved is approximately 60%.
Private Residential
The residential development business achieved 127 sale completions during the year, compared to 69 for FY 2015. This resulted in a 65.3% increase in revenues to GBP26.3 million (FY 2015: GBP15.9 million).
The gross margin for the business was 11.5% (FY 2015: 16.6%) but was held back by sales at two legacy development sites at nil margin. Achieving these sales was a key objective for the business, as it released cash from brought-forward inventory. Sales at the two sites (Gorse Stacks in Chester and the canal marina development at Droylsden, Manchester) totalled GBP11.0 million in the year. We completed the sale of all but two of the apartments at Gorse Stacks by the year end, with sales at Droylsden ongoing. The gross margin for the residential business will continue to strengthen as more profitable developments come on stream.
At the year end, the private residential business had a land bank of 573 plots (FY 2015: 595 plots).
Private Rented Sector
PRS is a key part of our growth strategy. We are currently undertaking our first purpose--built PRS development in Leeds. The 322-apartment scheme is scheduled for completion in FY 2017 and has been forward sold to a leading institutional investor.
We aim to grow our PRS business sustainably and are reviewing further opportunities. During the year, we also established Five Nine Living, our management platform for PRS schemes. Five Nine Living will manage the Leeds scheme on completion and we expect to start taking market share going forwards.
Strategy
We have set clear strategic objectives for each part of our business. By exploiting positive market conditions and choosing only the best opportunities, we will grow our student accommodation business and take further market share with Fresh Student Living.
Our student accommodation expertise is directly transferable to the PRS market. We are looking to build on our experience and our institutional relationships to develop real momentum in this area, while always being mindful of the need to expand in a sustainable way. In private residential development, our approach is to utilise our existing land bank and to acquire further sites if suitable opportunities arise.
People
I want to thank everyone in the Group for their contributions this year, in particular in stepping up to ensure we continued to deliver for clients during the IPO process. We are fortunate to have an extremely loyal and hardworking group of colleagues, and it is important to me that we look after them and maximise their potential. A key benefit of the IPO is the greater sense of ownership it has given to our people, who all received shares through an employee Share Incentive Plan ("SIP") on flotation. Coupled with our culture of empowering people to take decisions, this means our people truly want to see the business develop and succeed.
Sustainability
Watkin Jones is naturally focused on the long term. Economic, social and environmental sustainability is therefore integral to the way we work. The Group has robust policies embedded in every area of our activities, which offer support and guidance on how we expect our team to conduct themselves. We look to understand and address the needs of all our stakeholders, which include our people, clients, supply chain, communities and our shareholders. We also work hard to minimise our impact on both the local and global environment.
Outlook
The outlook for FY 2017 is positive and we expect to make further progress. Nine of the ten schemes scheduled to complete in the year have been forward sold and are progressing well on site, with the tenth scheme in legal negotiations.
Our forward sale model means that FY 2017 will also benefit from our progress on schemes delivering in later years. We are looking to complete eleven schemes in FY 2018. Ten have planning consents and planning has been submitted on the remaining scheme. Some of our 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 our largest ever project.
Mark Watkin Jones
Chief Executive Officer
17 January 2017
CHIEF FINANCIAL OFFICER'S REVIEW
The Group delivered a strong financial performance in FY 2016, with growth in revenue, gross margin and earnings, as well as a robust cash inflow.
FY2016 FY 2015
Continuing operations GBPm GBPm Change
----------------------------------------- ------ -------- ------
Revenue 267.0 244.2 +9.3%
Gross profit 53.8 44.0 +22.2%
Overheads (15.9) (11.6) +37.4%
Operating profit before exceptional
IPO costs 37.9 32.5 +16.7%
Exceptional IPO costs (26.6) -
Operating profit 11.3 32.5
Share of profit in joint ventures 3.0 1.2
Net finance costs (1.0) (0.7)
Profit before tax 13.3 32.9
Tax (8.2) (6.3)
Profit for the year 5.1 26.6
Basic earnings per share from continuing 3.8p GBP26.61
operations
Adjusted basic earnings per share 12.4p 10.4p +18.9%
Dividend per share 4.0p -
----------------------------------------- ------ -------- ------
The adjusted basic earnings per share figures are shown for comparative purposes on a proforma basis using the number of shares in issue at 30 September 2016.
Revenue
Revenue from continuing operations increased by 9.3% to GBP267.0 million, as a result of good growth in our student accommodation development business, an initial contribution from Fresh Student Living and an increase in the number of sales completions in our private residential business. More information on revenue growth in each business can be found in the Chief Executive Officer's Review.
Gross profit
Gross profit rose from GBP44.0 million in FY 2015 to GBP53.8 million this year, resulting in a gross margin of 20.1% (FY 2015: 18.0%). The higher gross margin reflects the increasing outturns from our student accommodation projects, driven in part by the quality of sites selected, the cessation of lower margin student accommodation contracting work and the high gross margin on the initial revenues contributed by Fresh. However, the gross margin for the year was held back by the sale of legacy private residential developments at nil margin.
Overheads
Overheads comprise administrative expenses and distribution costs, and include key functions such as our in-house procurement, quantity surveyors and commercial teams. Overheads increased by 37.4% to GBP15.9 million. This reflects expansion of the Group's operations, the overheads attributable to Fresh and some additional costs related to our new status as a public company.
Operating profit before exceptional IPO costs
Operating profit before the impact of exceptional IPO costs increased by 16.7% to GBP37.9 million, representing a margin of 14.2% (FY 2015: 13.3%).
Exceptional IPO costs
The Group incurred a number of exceptional costs in relation to the IPO in March 2016. These totalled GBP26.6 million and comprised GBP6.5 million of transaction-related fees and commissions, and GBP20.1 million for settling share--based management incentive arrangements that triggered on completion of the IPO.
Share of profit in joint ventures
We have a number of project-specific joint ventures with Lacuna Developments Limited, based in Northern Ireland, enabling us to develop student accommodation schemes in Belfast. We completed one such scheme in FY 2016 and forward sold a second. We also have a joint venture interest in a student accommodation asset which we had previously developed in Ipswich (Athena Hall). Our share of profit in joint ventures for the year totalled GBP3.0 million, up from GBP1.2 million in FY 2015.
Finance costs
Our net finance costs totalled GBP1.0 million, as compared to the GBP0.7 million incurred in FY 2015. During the year, we put in place new debt and working capital facilities (see statement of financial position and cash flows below). Net finance costs includes the costs of arranging these facilities, as well as non-utilisation fees.
Taxation
The tax charge for the year was GBP8.2 million, representing an effective tax rate of 65.6%. This is significantly higher than the statutory rate of corporation tax of 20%, as a result of most of the exceptional IPO costs incurred not being deductible for tax. The underlying rate of tax for the year was approximately 20%.
Earnings per share
Basic earnings per share from continuing operations were 3.8 pence, after the impact of exceptional items. On a proforma basis, using the number of shares in issue in Watkins Jones plc at 30 September 2016, adjusted earnings per share from continuing operations, which is calculated before exceptional items, increased by 18.9% to 12.4 pence (FY 2015: 10.4 pence).
Dividends
As discussed in the Chairman's Statement, the Board has recommended a final dividend of 2.67 pence per share, giving a total dividend for the year of 4.0 pence per share. This is in line with our guidance at the time of the IPO.
The cash cost of the total dividend will be GBP10.2 million, of which GBP3.4 million was paid in the year.
Adjusted EBITDA
Adjusted EBITDA is an important measure of underlying performance for the Group. It is calculated as operating profit plus profit from joint ventures, before interest, tax, depreciation, amortisation and exceptional items.
Adjusted EBITDA increased by 22.1% to GBP41.6 million (FY 2015: GBP34.1 million), representing an adjusted EBITDA margin of 15.6% (FY 2015: 14.0%).
Statement of financial position and cash flows
The Group had net cash at the year end of GBP32.2 million, comprising cash of GBP47.2 million less borrowings of GBP15.0 million. In comparison, net cash at 30 September 2015 stood at GBP39.1 million, made up of GBP59.3 million of cash less borrowings of GBP20.2 million. Excluding the impact of the exceptional IPO costs of GBP26.6 million, the Group generated a net cash inflow from operating activities of GBP41.7 million (FY 2015: GBP28.4 million).
During the year the Group acquired Fresh for a price of GBP15.0 million, the net cash cost of which was GBP14.5 million after taking into account cash of GBP0.5 million in the balance sheet of Fresh. The Group also paid GBP13.4 million in dividends, comprising a pre-IPO dividend of GBP10.0 million and the interim dividend of GBP3.4 million.
Our strong cash generation results from our forward sale model and our progress in releasing cash from inventory and work in progress, particularly associated with legacy residential and commercial developments.
Inventory and work in progress stood at GBP128.2 million at 30 September 2016, compared to GBP119.7 million at the end of the previous year. This balance will reduce as a result of the forward sales announced between the year end and the date of this announcement.
Prior to the IPO, we agreed a new GBP40.0 million, five-year revolving credit facility ("RCF") and a GBP10.0 million working capital facility, both with HSBC. The RCF is available to support our land procurement and development opportunities and will be used for strategic land acquisitions or to fund discrete development activities where required, alongside the forward sale model. At the year end, both the RCF and working capital facility were unutilised.
Philip Byrom
Chief Financial Officer
17 January 2017
For further information:
Watkin Jones plc
Mark Watkin Jones, Chief Tel: +44 (0) 1248 362
Executive Officer 516
Philip Byrom, Chief Financial www.watkinjonesplc.com
Officer
Zeus Capital Limited (Nominated Adviser
& Joint Broker)
Corporate Finance
Dan Bate / Jamie Peel Tel: +44 (0) 161 831
1512
Corporate Broking Tel: +44 (0) 20 3829
5000
Dominic King / Benjamin Robertson www.zeuscapital.co.uk
Peel Hunt LLP (Joint Broker) Tel: +44 (0) 20 7418
8900
Mike Bell / Matthew Brooke-Hitching www.peelhunt.com
Media enquiries:
Buchanan Henry Harrison-Topham / Richard Tel: +44 (0) 20 7466 Oldworth 5000 Jamie Hooper / Stephanie Watson watkinjones@buchanan.uk.com www.buchanan.uk.com
Notes to Editors
Watkin Jones is a leading UK developer and constructor of multi occupancy property assets, with a focus on the student accommodation sector. The Group has strong relationships with institutional investors, and a good reputation for successful, on-time-delivery of high quality developments. Since 1999, Watkin Jones has delivered over 31,800 student beds across 98 sites, making it a key player and leader in the UK purpose built student accommodation market. In addition, Watkin Jones has been responsible for over 50 residential developments, ranging from starter homes to executive housing and apartments.
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. Key components of the business model are:
-- Site identification - extensive experience of site identification and acquisition facilitates high quality sites being acquired;
-- Planning consents - in depth knowledge and experience of the planning consent process specific to this type of asset facilitates high success rates on planning applications;
-- In-house construction and delivery - in-house construction expertise, management and delivery limits reliance on third parties and, together with favourable contractual relationships with key suppliers, enhances control of cost;
-- Funding structure - forward sale model reduces risk for Watkin Jones and provides security and visibility of the asset pipeline for investors. The Group has strong relationships with blue chip investors, including a number that are repeat investors in Watkin Jones developments; and
-- Asset management - dedicated property management division provides a continued service solution to investors post development completion and completes the 'end to end' business model.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2016
Year ended Year ended
30 September 30 September
2016 2015
Notes GBP'000 GBP'000
------------------------------------ ----- ------------ ------------
Continuing operations
Revenue 266,980 244,246
Cost of sales (213,169) (200,198)
------------------------------------ ----- ------------ ------------
Gross profit 53,811 44,048
Administrative expenses (14,551) (10,611)
Distribution costs (1,377) (981)
------------------------------------ ----- ------------ ------------
Operating profit before exceptional
IPO costs 37,883 32,456
Exceptional IPO costs 5 (26,561) -
------------------------------------ ----- ------------ ------------
Operating profit 11,322 32,456
Share of profit in joint ventures 2,972 1,165
Finance income 252 95
Finance costs (1,282) (810)
------------------------------------ ----- ------------ ------------
Profit before tax from continuing
operations 13,264 32,906
Income tax expense 6 (8,179) (6,296)
------------------------------------ ----- ------------ ------------
Profit for the year from continuing
operations 5,085 26,610
------------------------------------ ----- ------------ ------------
Discontinued operations
Loss after tax for the year from
discontinued operations (878) (4,433)
------------------------------------ ----- ------------ ------------
Profit for the year attributable
to ordinary equity holders of the
parent 4,207 22,177
------------------------------------ ----- ------------ ------------
Other comprehensive income
Subsequently reclassified to income
statement:
Net gain on available-for-sale
financial assets 116 112
------------------------------------ ----- ------------ ------------
Total comprehensive income for
the year attributable to ordinary
equity holders of the parent 4,323 22,289
------------------------------------ ----- ------------ ------------
Pence GBP
--------------------------------------------------------- ------ ------
Earnings per share for the year attributable to ordinary
equity holders of the parent
Basic earnings per share 3.123 22.177
--------------------------------------------------------- ------ ------
Basic earnings per share from continuing operations 7 3.774 26.610
--------------------------------------------------------- ------ ------
Adjusted basic earnings per share from continuing
operations (excluding operating exceptional costs) 723.489 26.610
--------------------------------------------------------- ------ ------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 September 2016
30 September 30 September
2016 2015
Notes GBP'000 GBP'000
-------------------------------------- ----- ------------ ------------
Non-current assets
Intangible assets 9 15,521 -
Property, plant and equipment 1,876 4,807
Investment in joint ventures 5,950 7,220
Deferred tax asset 262 1,514
Other financial assets 2,545 1,169
-------------------------------------- ----- ------------ ------------
26,154 14,710
-------------------------------------- ----- ------------ ------------
Current assets
Inventory and work in progress 128,157 119,683
Trade and other receivables 16,436 20,553
Cash and cash equivalents 12 47,221 59,270
-------------------------------------- ----- ------------ ------------
191,814 199,506
-------------------------------------- ----- ------------ ------------
Total assets 217,968 214,216
-------------------------------------- ----- ------------ ------------
Current liabilities
Trade and other payables (90,781) (69,696)
Provisions (253) (339)
Other financial liabilities (63) (47)
Interest-bearing loans and borrowings (14,970) (9,759)
Current tax liabilities (6,018) (7,077)
-------------------------------------- ----- ------------ ------------
(112,085) (86,918)
-------------------------------------- ----- ------------ ------------
Non-current liabilities
Interest-bearing loans and borrowings (43) (10,424)
Deferred tax liabilities (1,151) (396)
Provisions (1,957) (2,124)
Other non-current liabilities - (1,304)
-------------------------------------- ----- ------------ ------------
(3,151) (14,248)
-------------------------------------- ----- ------------ ------------
Total liabilities (115,236) (101,166)
-------------------------------------- ----- ------------ ------------
Net assets 102,732 113,050
-------------------------------------- ----- ------------ ------------
Equity
Share capital 2,553 1,000
Share premium 84,612 6,300
Merger reserve (75,383) -
Available-for-sale reserve 269 153
Retained earnings 90,681 105,597
-------------------------------------- ----- ------------ ------------
Total equity 102,732 113,050
-------------------------------------- ----- ------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2016
Available
Share Share Merger -for-sale Retained
capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------- --------- -------- --------- --------- ---------
Balance at 1 October
2014 1,000 6,300 - 41 83,420 90,761
--------------------- ------- --------- -------- --------- --------- ---------
Profit for the
year - - - - 22,177 22,177
Other comprehensive
income - - - 112 - 112
--------------------- ------- --------- -------- --------- --------- ---------
Balance at 30
September 2015 1,000 6,300 - 153 105,597 113,050
--------------------- ------- --------- -------- --------- --------- ---------
Profit for the
year - - - - 4,207 4,207
Other comprehensive
income - - - 116 - 116
Dividend paid
(note 8) - - - - (13,395) (13,395) Share restructuring prior to IPO 1,695 167,864 - - - 169,559 Capital reduction prior to IPO - (167,864) - - 167,864 - Issue of shares on IPO 855 84,586 - - - 85,441 Issue of shares to employees of Fresh Student Living Limited - 26 - - - 26 Issue of shares to employee SIP 3 - - - - 3 Group reconstruction of Watkin Jones plc and Watkin Jones Group Limited (1,000) (6,300) (75,383) - (173,592) (256,275) --------------------- ------- --------- -------- --------- --------- --------- Balance at 30 September 2016 2,553 84,612 (75,383) 269 90,681 102,732 --------------------- ------- --------- -------- --------- --------- ---------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 September 2016
Year ended Year ended
30 September 30 September
2016 2015
Notes GBP'000 GBP'000
------------------------------------- ----- ------------ ------------
Cash flows from operating activities
Cash inflow from operations 11 24,457 32,008
Interest received 252 95
Interest paid (1,408) (875)
Interest element of finance lease
rental payments (22) (20)
Tax paid (8,152) (2,777)
------------------------------------- ----- ------------ ------------
Net cash inflow from operating
activities 15,127 28,431
------------------------------------- ----- ------------ ------------
Cash flows from investing activities
Acquisition of property, plant
and equipment (150) (50)
Proceeds on disposal of property,
plant and equipment 2,750 70
Acquisition of Fresh Student Living
Limited (net of cash acquired) (14,496) -
Loan repayment from joint venture 4,242 1,339
Purchase of other financial assets (1,024) (378)
------------------------------------- ----- ------------ ------------
Net cash (outflow)/inflow from
investing activities (8,678) 981
------------------------------------- ----- ------------ ------------
Cash flows from financing activities
Dividends paid (13,395) -
Issue of shares prior to IPO 88,151 -
Issue of shares on IPO 85,441 -
Cash outflow on group reconstruction
of (173,592) -
Watkin Jones plc and Watkin Jones
Group Limited
Capital element of finance lease
rental payments (278) (393)
New bank loans - 8,940
Repayment of bank loans (4,825) (4,627)
------------------------------------- ----- ------------ ------------
Net cash (outflow)/inflow from
financing activities (18,498) 3,920
------------------------------------- ----- ------------ ------------
Net (decrease)/increase in cash (12,049) 33,332
Cash and cash equivalents at 1
October 2015 and 1 October 2014 59,270 25,938
------------------------------------- ----- ------------ ------------
Cash and cash equivalents at 30
September 2016 and 30 September
2015 12 47,221 59,270
------------------------------------- ----- ------------ ------------
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
for the year ended 30 September 2016
1. General information
Watkin Jones plc (the "Company") is a public limited company incorporated in the United Kingdom under the Companies Act 2006 (Registration number 09791105). The Company is domiciled in the United Kingdom and its registered address is Units 21-22, Llandygai Industrial Estate, Bangor, Gwynedd, LL57 4YH.
The Company was incorporated as HDCO3 Limited on 23 September 2015.
The Company acquired all the issued shares in Watkin Jones Group Limited on 15 March 2016. This was achieved through a combination of a share for share exchange over 319,247 shares in Watkin Jones Group Limited, involving the issue of 81,407,985 ordinary shares in the Company at an issue price of GBP1 per share, and the completion of an agreement to purchase the remaining 680,753 shares for an amount of GBP173,592,015 in cash. This was settled on 23 March 2016. On 15 March 2016 the Company was re-registered as Watkin Jones plc.
On 23 March 2016 the Company completed an Initial Public Offering by way of a placing of 85,440,493 ordinary shares at 100 pence per share and a vendor placing of 45,900,100 ordinary shares at 100 pence per share. The Company's shares were admitted to trade on the Alternative Investment Market ("AIM") of the London Stock Exchange on 23 March 2016.
The principal activities of the Company and its subsidiaries (collectively "the Group") are those of property development and the management of properties for multiple residential occupation.
The consolidated financial statements for the Group for the year ended 30 September 2016 comprises the Company and the subsidiaries that were acquired by the Company before the listing of the Company's shares on AIM. The basis of preparation of the consolidated financial statements is set out in note 2 below.
This report was approved by the Directors on 17 January 2017.
2. Basis of preparation
The financial information set out above does not constitute statutory accounts for the year ended 30 September 2016 or 2015 but is derived from those accounts. Statutory accounts for the year ended 30 September 2015 have been delivered to the Registrar of Companies and the statutory accounts for the year ended 30 September 2016 will be delivered to the Registrar of Companies and sent to all shareholders shortly. The auditors have reported on those accounts; their reports were unqualified, did not draw any attention to any matters by way of emphasis without qualifying their report and did not contain statements under S498 (2) or (3) of the Companies Act 2006 or equivalent preceding legislation.
The consolidated financial statements of the Group for the year ended 30 September 2016 and the comparatives for the year ended 30 September 2015 have been prepared on the basis that Watkin Jones plc was in existence throughout these periods. The terms of the acquisition of the shares in Watkin Jones Group Limited were such that the Group reconstruction should be accounted for as a continuation of the existing Group rather than as an acquisition, and as such merger accounting has been applied. The cash consideration paid as part of the Group reconstruction has been reflected against retained earnings as a distribution. Accordingly, the financial statements and the comparatives have been prepared on this basis.
The financial statements of the Group have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU. As a result of the IPO, the Group prepared an admission document to AIM which incorporated the first time adoption of IFRS adopted by the EU and all transition adjustments.
The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events may ultimately differ from those estimates.
The financial statements have been prepared on a going concern basis. The Directors consider that it is appropriate for the financial statements to be prepared on this basis having considered all relevant information, including the Group's trading and cash flow forecasts, the trading opportunities available to the Group and the ongoing support of its banks.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in the financial statements. The financial statements are prepared on the historical cost basis except as disclosed in these accounting policies.
The financial statements are presented in pounds sterling and all values are rounded to the nearest thousand (GBP'000), except when otherwise indicated.
3. Accounting policies
With the exception of the accounting policy for intangible assets, which has been adopted for the first time in the preparation of these financial statements and is set out below, the accounting policies used in preparing these financial statements are the same as those set out and used in preparing the financial information that is presented in the Company's Admission Document to AIM dated 16 March 2016. The accounting policies will be disclosed in full within the Group's forthcoming financial statements.
3.1 Other intangible assets
The cost of intangibles acquired as part of a business combination is the fair value at the date of acquisition.
Intangible assets other than goodwill are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to the consolidated statement of comprehensive income on a straight-line basis over the estimated useful lives of the intangible assets as follows:
Customer relationships: - 11 years Brand: - 10 years
4. Segmental reporting
The Group has identified three segments for which it reports under IFRS 8 'Operating Segments'. The following represents the segments that the Group operates in:
a. Student Accommodation Development - purpose built student accommodation developments; b. Residential Development - the development of traditional residential property; and
c. Student Accommodation Management - the management of student accommodation property. This segment was established following the acquisition of Fresh Student Living Limited on 25 February 2016.
Corporate - central revenue and costs not solely attributable to any one division.
All revenues arise in the UK.
Performance is measured by the Board based on gross profit as reported in the management accounts.
Student
Student Accommodation
Accommodation Residential Management Corporate Total
Year ended 30 September GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2016
---------------------------- ------------- ----------- ------------- --------- --------
Segmental revenue 237,163 26,312 2,828 677 266,980
---------------------------- ------------- ----------- ------------- --------- --------
Segmental gross profit 48,575 3,033 1,666 537 53,811
Administration expenses - - (1,375) (13,176) (14,551)
Distribution costs - - (1,377) (1,377)
Exceptional IPO costs - - - (26,561) (26,561)
Share of operating
profit in joint ventures 2,975 - - (3) 2,972
Finance income - - - 252 252
Finance costs - - - (1,282) (1,282)
---------------------------- ------------- ----------- ------------- --------- --------
Profit/(loss) before
tax 51,550 3,033 291 (41,610) 13,264
Taxation - - - (8,179) (8,179)
---------------------------- ------------- ----------- ------------- --------- --------
Continuing profit/(loss)
for the year 51,550 3,033 291 (49,789) 5,085
---------------------------- ------------- ----------- ------------- --------- --------
Loss from discontinued
operations (878)
---------------------------- ------------- ----------- ------------- --------- --------
Profit for the year
attributable to ordinary
equity shareholders
of the parent 4,207
---------------------------- ------------- ----------- ------------- --------- --------
Inventory and work
in progress 74,141 53,666 - - 127,807
---------------------------- ------------- ----------- ------------- --------- --------
Inventory and work
in progress - discontinued 350
---------------------------- ------------- ----------- ------------- --------- --------
Total inventory and
work in progress 128,157
---------------------------- ------------- ----------- ------------- --------- --------
Student
Accommodation Residential Corporate Total
Year ended 30 September 2015 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ------------- ----------- --------- --------
Segmental revenue 228,153 15,917 176 244,246
---------------------------------- ------------- ----------- --------- --------
Segmental gross profit/(loss) 41,505 2,650 (107) 44,048
Administration expenses - - (10,611) (10,611)
Distribution costs - - (981) (981)
Share of operating profit
in joint ventures 1,165 - - 1,165
Finance income - - 95 95
Finance costs - - (810) (810)
---------------------------------- ------------- ----------- --------- --------
Profit/(loss) before tax 42,670 2,650 (12,414) 32,906
Taxation - - (6,296) (6,296)
---------------------------------- ------------- ----------- --------- --------
Continuing profit/(loss)
for the year 42,670 2,650 (18,710) 26,610
---------------------------------- ------------- ----------- --------- --------
Loss from discontinued operations (4,433)
---------------------------------- ------------- ----------- --------- --------
Profit for the year attributable
to ordinary equity shareholders
of the parent 22,177
---------------------------------- ------------- ----------- --------- --------
Inventory and work in progress 43,996 57,659 - 101,655
---------------------------------- ------------- ----------- --------- --------
Inventory and work in progress
- discontinued 18,028
---------------------------------- ------------- ----------- --------- --------
Total inventory and work
in progress 119,683
---------------------------------- ------------- ----------- --------- --------
5. Exceptional IPO costs
Year ending Year ending
30 September 30 September
2016 2015
GBP'000 GBP'000
------------------------------ ------------ ------------
Exceptional IPO costs
IPO transaction costs 6,500 -
Management incentive payments 20,061 -
------------------------------ ------------ ------------
Total exceptional IPO costs 26,561 -
------------------------------ ------------ ------------
The charge for management incentive payments comprises amounts payable to certain senior management of Watkin Jones Group Limited in connection with various long term incentive plans which fell due on the admission to AIM of Watkin Jones plc. The amount comprises a total charge of GBP21,735,400, plus stamp duty costs of GBP98,440, less an amount previously provided of GBP1,773,200. Of the total incentive payments made, management invested GBP13,942,984 in shares in Watkin Jones plc as part of the IPO.
6. Income taxes
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
-------------------------------------------------- ------------ ------------
Current income tax
UK corporation tax on profits for the year 7,508 7,212
Adjustments in respect of previous periods (299) (99)
-------------------------------------------------- ------------ ------------
Total current tax 7,209 7,113
-------------------------------------------------- ------------ ------------
Deferred tax
Origination and reversal of temporary differences 135 (892)
Impact of change in tax rate (52) 75
Adjustments in respect of prior year 887 -
-------------------------------------------------- ------------ ------------
Total deferred tax 970 (817)
-------------------------------------------------- ------------ ------------
Total tax expense 8,179 6,296
-------------------------------------------------- ------------ ------------
Reconciliation of total tax expense
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
------------------------------------------------------------- ------------ ------------
Accounting profit before tax from continuing operations 13,264 32,906
Accounting loss before tax from discontinued operations (1,098) (4,753)
------------------------------------------------------------- ------------ ------------
Accounting profit before income tax 12,166 28,153
Profit multiplied by standard rate of corporation tax in the
UK of 20.0% (2015: 20.5%) 2,433 5,771
Expenses not deductible 4,958 125
Joint ventures results reported net of tax (594) (239)
Other differences 30 418
Prior period adjustment 1,161 (99)
------------------------------------------------------------- ------------ ------------
At the effective rate of tax of 65.6% (2015: 21.2%) 7,988 5,976
------------------------------------------------------------- ------------ ------------
Income tax expense reported in the statement of profit or
loss 8,179 6,296
Income tax attributed to a discontinued activity (220) (320)
Income tax attributed to an available-for-sale asset 29 -
------------------------------------------------------------- ------------ ------------
7,988 5,976
------------------------------------------------------------- ------------ ------------
7. Earnings per share
Basic earnings per share ("EPS") amounts are calculated by dividing the net profit or loss for the year attributable to ordinary equity holders of the parent by the weighted average number of shares in issue during the year.
There is no difference between basic earnings per share and diluted earnings per share as there are no dilutive share option arrangements in place at 30 September 2016.
The following table reflects the income and share data used in the basic and diluted EPS computations:
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
-------------------------------------------------------------- ------------ ------------
Profit attributable to ordinary equity holders of the parent 4,207 22,177
Profit from continuing operations attributable to ordinary
equity holders of the parent 5,085 26,610
Adjusted profit from continuing operations attributable to
ordinary equity holders of the parent (excluding exceptional
IPO costs) 31,646 26,610
-------------------------------------------------------------- ------------ ------------
Number Number
of shares of shares
------------------------------------------------------- ----------- ---------
Number of ordinary shares for basic earnings per share 134,729,152 1,000,000
------------------------------------------------------- ----------- ---------
Pence GBP
----------------------------------------------------------- ------ ------
Basic earnings per share from continuing operations
Basic profit for the year attributable to ordinary equity
holders of the parent 3.774 26.610
Adjusted proforma basic earnings per share from continuing
operations (excluding exceptional IPO costs)
Basic profit for the year attributable to ordinary equity
holders of the parent 23.489 26.610
----------------------------------------------------------- ------ ------
Using the number of shares in issue at 30 September 2016, the adjusted proforma basic earnings per share from continuing operations for the year ending 30 September 2016 would have been 12.397 pence (2015: 10.424 pence).
8. Dividends
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
----------------------------------------------------- ------------ ------------
Dividend paid prior to IPO 10,000 -
Interim dividend paid in February 2016 of 1.33 pence 3,395 -
----------------------------------------------------- ------------ ------------
13,395 -
----------------------------------------------------- ------------ ------------
The final dividend proposed for the year ended 30 September 2016 is 2.67 pence per ordinary share. This dividend was declared after 30 September 2016 and as such the liability of GBP6,816,000 has not been recognised at that date.
9. Intangible assets
Customer
relationships Brand Goodwill Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- ------------- ------- -------- -------
Cost
At 1 October 2014 - - 3,193 3,193
Impairment during the year - - (3,193) (3,193)
---------------------------------------- ------------- ------- -------- -------
At 30 September 2015 - - - -
---------------------------------------- ------------- ------- -------- -------
Arising on acquisition of Fresh Student
Living (note 10) 5,604 499 9,744 15,847
---------------------------------------- ------------- ------- -------- -------
At 30 September 2016 5,604 499 9,744 15,847
---------------------------------------- ------------- ------- -------- -------
Amortisation
At 1 October 2014 - - - -
Amortisation for the year - - - -
---------------------------------------- ------------- ------- -------- -------
At 30 September 2015 - - - -
---------------------------------------- ------------- ------- -------- -------
Amortisation for the year (297) (29) - (326)
---------------------------------------- ------------- ------- -------- -------
At 30 September 2016 (297) (29) - (326)
---------------------------------------- ------------- ------- -------- -------
Net book value
As at 30 September 2016 5,307 470 9,744 15,521
---------------------------------------- ------------- ------- -------- -------
As at 30 September 2015 - - - -
---------------------------------------- ------------- ------- -------- -------
The Directors have reviewed the carrying value of the investment in Fresh Student Living Limited, which is a single CGU, at 30 September 2016, compared to its recoverable amount and are satisfied that no impairment is required. The recoverable amount has been based on value in use, by reference to the budgets and projected cash flows for the CGU over a 20 year period, with future cash flows discounted at a rate of 10% to reflect the time value of money.
10. Acquisitions
Acquisition of Fresh Student Living Limited
On 25 February 2016 Founded Living Limited, a subsidiary of Watkin Jones Group Limited, acquired the 750 ordinary shares in Fresh Student Living Limited ("Fresh") held by Mark and Glyn Watkin Jones, who were both Directors of and shareholders in Watkin Jones Group Limited, for a cash consideration of GBP11,835,512. The shares acquired represented 77.48% of the issued shares of the company.
On 23 March 2016, on satisfaction of the condition of admission to AIM of Watkin Jones plc, Founded Living Limited acquired the 218 A ordinary shares held by various directors and senior managers of Fresh, for a cash consideration of GBP3,164,488. The shares acquired represented the remaining issued shares of the company. As a condition of the acquisition of these shares, the vendor shareholders were required to invest GBP1,397,609, being 50% of the net of tax proceeds received, in shares in Watkin Jones plc as part of the IPO.
The total consideration paid for the shares in Fresh was therefore GBP15,000,000, plus stamp duty of GBP75,010.
Fresh is engaged in the management of purpose built student accommodation. Its services include the letting and operational management of properties, for which the company is engaged under a management agreement and receives a management fee, as well as consultancy and mobilisation services provided during the development phase of a student property.
The resulting goodwill of GBP9,744,000 arising on the acquisition has been capitalised and is subject to an annual impairment review by management. Goodwill is attributed to Fresh's knowledge and expertise in the letting and management of purpose built student accommodation and in the synergy with the Group's student accommodation development business.
The book and fair value of the net assets acquired in respect of Fresh were as follows:
Fair value
Book value adjustment Fair value
GBP'000 GBP'000 GBP'000
------------------------------ ---------- ---------- ----------
Non-current assets
Intangible assets
Customer relationships - 5,604 5,604
Brand - 499 499
Goodwill - 9,744 9,744
Property, plant and equipment 90 - 90
Deferred tax asset 261 (228) 33
Other financial assets 150 54 204
------------------------------ ---------- ---------- ----------
501 15,673 16,174
------------------------------ ---------- ---------- ----------
Current assets
Trade and other receivables 1,262 - 1,262
Cash at bank and in hand 579 - 579
------------------------------ ---------- ---------- ----------
1,841 - 1,841
------------------------------ ---------- ---------- ----------
Total assets 2,342 15,673 18,015
------------------------------ ---------- ---------- ----------
Current liabilities
------------------------------ ---------- ---------- ----------
Trade and other payables (1,830) (10) (1,840)
------------------------------ ---------- ---------- ----------
(1,830) (10) (1,840)
------------------------------ ---------- ---------- ----------
Non-current liabilities
Deferred tax liabilities - (1,100) (1,100)
------------------------------ ---------- ---------- ----------
- (1,100) (1,100)
------------------------------ ---------- ---------- ----------
Total liabilities (1,830) (1,110) (2,940)
------------------------------ ---------- ---------- ----------
Net assets 512 14,563 15,075
------------------------------ ---------- ---------- ----------
In the period since acquisition, Fresh contributed revenue of GBP2,828,000 and an operating profit of GBP291,000. Had Fresh been acquired on 1 October 2015, it would have contributed a full-year revenue of GBP5,148,000 and an operating profit of GBP623,000. The Group's total revenue from continuing operations would have been GBP269,300,000 and the Group's operating profit would have been GBP11,654,000.
11. Reconciliation of operating profit to net cash flows from operating activities
Year ended Year
ended
30 September 30 September
2016 2015
GBP'000 GBP'000
--------------------------------------------------------------- ------------ ------------
Profit before tax from continuing operations 13,264 32,906
Loss before tax from discontinued operations (1,098) (4,753)
--------------------------------------------------------------- ------------ ------------
Profit before tax 12,166 28,153
Depreciation 341 489
Amortisation of intangible assets 326 -
Loss/(profit) on sale of plant and equipment 80 (40)
Issue of shares to employee SIP and employees of Fresh Student
Living Limited 29 -
Finance income (252) (95)
Finance costs 1,282 810
Share of profit in joint ventures (2,972) (1,165)
Increase in inventory and work in progress (8,474) (28,026)
Interest capitalised in development land, inventory and work
in progress 148 329
Decrease in trade and other receivables 5,353 13,314
Increase in trade and other payables 16,682 15,489
Provision for property lease commitment (252) (443)
--------------------------------------------------------------- ------------ ------------
Net cash inflow from operating activities 24,457 32,008
--------------------------------------------------------------- ------------ ------------
Major non-cash transactions
There were no major non-cash transactions during the period.
12. Analysis of net cash/(debt)
At beginning Non-cash At end
of year Cash movements of year
flow
30 September 2016 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------------ -------- --------- --------
Cash at bank and in hand 59,270 (12,049) - 47,221
Finance leases (538) 278 - (260)
Bank loans (19,645) 4,825 67 (14,753)
------------------------- ------------ -------- --------- --------
Net cash 39,087 (6,946) 67 32,208
------------------------- ------------ -------- --------- --------
At beginning Non-cash At end
of year Cash movements of year
flow
30 September 2015 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------------ ------- --------- --------
Cash at bank and in hand 25,938 33,332 - 59,270
Finance leases (931) 393 - (538)
Bank loans (15,187) (4,313) (145) (19,645)
------------------------- ------------ ------- --------- --------
Net cash 9,820 29,412 (145) 39,087
------------------------- ------------ ------- --------- --------
13. Annual report
Copies of this announcement are available from the Company at Units 21-22 Llandygai Industrial Estate, Llandygai, Bangor, Gwynedd, LL57 4YH. The Group's annual report for the year ended 30 September 2016 will be posted to shareholders shortly and will be available on our website at www.watkinjones.com.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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