Watkin Jones Share Discussion Threads

[bothdavis] 20/12/2022 22:36

But what if you are wrong hybrazil?

[cordwainer] 20/12/2022 17:41

cordwainer - 20 Oct 2022 - 14:54:35 - 2624 of 2713 ::: WATKIN JONES - buildings for students - WJG
Net cash according to the last update was £75M which overtops the circa £25M paid in dividends over the past year. I would still hope and expect management to take a very cautious approach to dividends for the reasons stated in the trading update; i.e. WJG's customers are set to face a more challenging future on borrowing / financing costs for their construction projects. Anyway it looks like Huntonomics will keep a steadier ship economically whoever gets to be PM.

[hybrasil] 20/12/2022 16:04

Cordwainer

The dividend depends on transactions happening - they have already told us that two of them have gone on the back burner. If I am right there will be little or no dividend in 12 months time.


Jonwig

On a quick perusal

March 2016 £45,000,000 taken off the table by the family in the float.
March 2017 £70,000,000 taken off the table in a placing
Jan 2018 £ 7,500,000 Marks divorce
Nov 2019 £52,500,000 sale by the family.

Why get out of a 9 generation business. Risk - thats why. From my figures you will see the divorce accounts for only 5% of the sales

Don't get me wrong - I like the business of student housing but this share is wildly overpriced. It has to in my opinion end up at a discount to the 57p Net Asset Value.

If and when that happens Im a buyer

[jonwig] 20/12/2022 15:36

There was a divorce, which I think triggered some large share sales and may have had other consequences.

[cordwainer] 20/12/2022 15:18

I think it's much more likely the primary reason for the family exit was personal and in any case history now and a distraction from the investment case rather than a factor.
I'm not expecting anything but a depressed and wobbly / volatile share price through a general recession, this is only a dividend play with a strong balance sheet right now. Worth picking a few up somewhere near 80p or less. Then earnings could even bounce back within a couple of years and the share price along with it. Meanwhile - yield !

[hybrasil] 17/12/2022 03:52

Yes but they only went into this model of forward sales in a period of low interest.

And as I keep pointing out the family are now (wisely) nearly completely out

[archy147] 16/12/2022 15:59

Some people have very short memories! Base rates are still very low by historical standards.

UK base rates were above 3.5% EVERY YEAR for over 50 years between 1955 and 2008. With the average being around 8% during that time.

The world will keep on turning and companies will keep on doing business (Watkin Jones have been around since 1791). There's really no need to panic.

[hybrasil] 16/12/2022 10:52

I look in here every day. That interest rate rise to 3.5% surely is the nail in the coffin for any deals for the moment. Waiting for the next trading up date. Did the cfo come back to you on those contracts Goodpick?

Edit
Had a briefing this morning on construction costs - as a lot of steel comes (or came) from Mariupol or Belarus costs have now gone up by between 70 and 80%. Big block building can only suffer

[goodpick] 14/12/2022 13:05

Yes maybe Hybrasil - you still planning on taking out a short ? For a near term gain ?

[hybrasil] 14/12/2022 12:59

my theories might about to be debunked as it looks like inflation is gradually coming under control.

However in the short term at least interest rates are due to increase and that for the next two financial years is going to make doing deals difficult for WJG

[hybrasil] 12/12/2022 12:37

well do you want the good news or the bad news?

Bad news first

WJG is hard to short.

That could be for two reasons. Either there are a lot of people short already (wise punters in my view) or there is not a lot of stock there to short.

The good news
As I could only short 10% of what i had intended I have decided for the time being at any rate to wait.

[hybrasil] 09/12/2022 12:13

I was more thinking about the day before the results. Just waiting for my broker to ring me back.
You can be sure the company will have progressive well prepared.
From my experience of ADVFN you can be sure the company is aware of this thread.
It always tickles me how many CEOs and serious shareholders follow ADVFN

[goodpick] 09/12/2022 11:38

Hybrasil - the best time to execute your short on WJG will be just before it goes xdiv early next year.

Good luck with that.

I might email the CFO and ask them that question - good one. I was wondering about those two contracts.

[hybrasil] 09/12/2022 11:08

As I’m not a shareholder or even a short shareholder I have no entitlement to ask but surely someone on this thread could ring the cfo and see if there are unconditional contracts in place for the two sites referred to in the TU. After all 2023 is only around the corner
C
Thanks for pointing out the sale of lewisham.
I see Mr Scott (as is his right) declined to reveal the sale price

[christw1234] 09/12/2022 10:53

AXA the investment group giant has purchased the 758 bed student Vita accommodation development in Lewisham,
In a multi million pound deal
This shows the strength of the build to rent student market in the right location, which is critical for WJG going forward

[jonwig] 09/12/2022 09:59

Well, I'm staying neutral for the time being: the best way to profit from UK PLC might be to spot the companies which foreigners will buy.

Yes, a CFD account or spread bet might be the way to do it, but I had zero success about 20 years ago with that sort of thing. You could get stopped out when their price was different from the market price. Maybe it's improved since.

[hybrasil] 09/12/2022 09:47

Jonwig

Maybe I have a bee in my bonnet here.

It just has all the hallmarks. The 7 or is it 8th generation founding family selling out. Professional management in. I’ve done a lot of work with spec builders and frankly I don’t think it’s a place for professional management. You nearly need to be born into it.

Currently we are seeing the forward sale model broken and I think that’s the real catalyst for a problem

When I get around to working out how to short a share (I think I need to open a cfd account) and if I execute it, I will let this board know.

Good to see you here jonwig. I certainly wouldn’t bet against you!

[jonwig] 09/12/2022 09:34

hybrasil - you seem determined to prova a point with WJG so good luck - markets are made from competing views.

Personally I think you're making a big deal out of a slippage from one accounting period to another. It's worth pointing out that the shares lost a third of their value on the day of that announcement, which should be enough to price it in, added to the fact that early October was a maximum fear area for UK PLC!

I've no axe to grind as I sold out of these when Mark W J departed, but I'm actually looking at them again as a possible buy at some point. The company itself describes its balance sheet as strong, and it really is! (A current ratio of 3.3x is pretty good.)

I'll wait for your short to succeed, so that I can buy at a lower price.😏

[hybrasil] 09/12/2022 09:11

Haven’t shorted it - yet!!!

In over 40 years of trading I have never shorted a share but I’m about to make a start

[goodpick] 09/12/2022 09:04

So you have a short on this and will benefit if the price drops right Hybrasil ?

[hybrasil] 09/12/2022 08:44

TU 4/10/22
“Two market sales that were planned to close in September have been impacted by the recent market volatility and these are now planned to transact in FY 2023”

In my book this is obfuscation “close” in legal speak means completion. They now talk about “plan to transact”

As I read this they don’t have a contract.

The “plan” seems to be in the directors mind.

This is a short with a share price that will end up within 12 months below NAV unless market volatility ends

[goodpick] 08/12/2022 14:42

Hybrasil thats true you are right - investor appetite will slow due to the current interest rate environment. This created underperformance at the last year end update.

Looking forward to further factual updates from the company - until then we have to sit tight.

[hybrasil] 08/12/2022 13:14

Good pick

That’s exactly the point I am trying (and not very well!) to make

Effectively I am saying that sales will not happen at the rate of and the value at they happened in the past.

That’s all