Watkin Jones Share Discussion Threads

[hybrasil] 07/3/2023 10:31

Utg is an asset holder and deserves at the moment that valuation. Wjg is a spec (ish) builder

[disc0dave45] 07/3/2023 10:00

Good points and can't really disagree with the current outlook, but tbh it's the next few years I'm looking at not the past or here and now. They've already said investors are coming back and I don't see that changing, hopefully the trough has been reached.Don't know how you can say WJG is overvalued when on a forward PE of only 6x (UTG is twice that).

[hybrasil] 07/3/2023 09:44

I hadn’t intended posting till the trading update but Christ I think you are viewing Wjg as an asset holder.

Listen to the appalling presentation where it is manifestly clear it is not.

Wjg buys land builds either pbsa or btr and sells

Their issue is there are not buyers there at the moment (and with increasing interest rates -ecb- for example )the problem is not going to resolve soon.

It is now clear that the “expected to transact” transactions are not in contract

They have let 40 people go.

Bring it down to apples and bananas. If you can buy them but not sell them you don’t have a business.

I’m not saying Wjg is finished. Just over valued

[christw1234] 07/3/2023 08:51

Discodave45
Thanks, Velocity is the name of the game in uncertain terms
WJ does have more liabilities than liquid assets.
That’s one of the reasons I would like them to hold some assets on the BS to take advantage of the increase of rent.
Any decrease in earnings will have an adverse affect on WJ ability to pay down liabilities

[jeffian] 06/3/2023 22:54

#2827,

"I would like to see them hold some assets on their balance sheet to take advantage of the rental growth"

I was a commercial property developer through the dark days of the 1980's/90's. The "investments" held on the balance sheet were the developments we failed to sell!

[disc0dave45] 06/3/2023 21:47

What land acquisition deals have occurred in the last 4 days?, haven't seen any news on that front.Sorry but I've absolutely zero experience with this sector although I did hold WJG a few years back.When you say you'd want them to hold more assets on the BS are you talking debt / dilution to fund?, what credit facilities do they have do you know?. Personally staying clear, or trying to, of companies with debt. Other than those that look okay as recovery play / speculative.

[christw1234] 06/3/2023 21:38

I totally agree at the moment, my sentiment was changed by my personal experience of the PBSA market and WJ land acquisition deals

[disc0dave45] 06/3/2023 21:26

Thanks.I'm just confused by what you said about their model being broken, which wasn't your view a few days ago, what's changed?.Looking at UTG this looks a much better investment in terms of value and potential recovery.

[christw1234] 06/3/2023 21:20

Yes, and I’m speaking from personal experience of WJ

[disc0dave45] 06/3/2023 20:50

Do you hold WJG?.

[christw1234] 06/3/2023 20:35

discodave45
I have been in the PBSA market for over 25years, having developed multimillion student accommodation beds in various Cities.
I’m only giving my opinion on WJ in a very competitive overcrowded market they are not the leaders

[disc0dave45] 06/3/2023 20:13

Their model is completely different to HB's, although they are listed in the same index they are not listed in the same sector, due to their model they are actually listed in the financial sector rather than the consumer cyclicals. Likewise they aren't classified in the house building industry but real estate operations......possibly semantics but they are not classified the same because they aren't the same.

[christw1234] 06/3/2023 19:56

Discodave45
With respect in the present market WJ are classed as a property developer/ House builder.
Institutions will only buy into WJ at discounted prices.
IMO their Land acquisition leave a lot to be desired and far too Lumpy

[disc0dave45] 06/3/2023 18:51

Completely disagree, the reason I'm looking to invest is because their asset light model minimises the risks and given the macros any strategy that weakens balance sheet strength is not going to go down well in the city IMO. Particularly as the risks around their provisions to meet the Building Safety Act could be a lot more than they've allocated (not saying it will be), which could make a serious dent in their net cash. If you want to invest in a property developer / house builder, then you are in the wrong stock. Stick to what they know, it works!.My advice to folks would be to do your own research and not to take what's posted on a free BB as being gospel, particularly if those posting financial advice are not registered to do so (I'm assuming you aren't!).

[christw1234] 06/3/2023 10:23

My opinion is WJ need to up their game at the moment.
I would like to see them hold some assets on their balance sheet to take advantage of the rental growth they keep on about and the potential leverage for growth
Unite issued a strong set of results for 2022 without significant movement in their shares
My share advice is hold

[disc0dave45] 06/3/2023 09:29

You previously posted (only 4 days ago):"I consider WJ business model and relationship with institutional investors very strong"Now the model is apparently broken. #confused

[christw1234] 06/3/2023 08:55

IMO WJ need to be robust and streamlined in their acquisitions of the higher margins PBSA development opportunities.
Raising capital to buy development sites unconditionally, instead of the lumpy STP timeline process.
To regain shareholders and investors confidence WJ are going to have to speed up their pipeline of development opportunities, in a very competitive crowded market

[goodpick] 05/3/2023 12:50

Dont know where you got the broken piece from ?

[disc0dave45] 05/3/2023 12:01

Don't think by any stretch of the imagination that the forward funding model is broken, quite the opposite IMO.

[christw1234] 05/3/2023 10:33

Bottom line, with the forward funding model broken.
WJ will need to find a way to fund acquisitions and development of PBSA sites.
Having cash with no development sites is devaluing with high inflation

[christw1234] 05/3/2023 09:53

Watching WJ investor’s presentation, their business model is built on a very robust pipeline of PBSA sites.
The foreword these potential developments is not fluid at present due to higher interest rate.
WJ future profitability will only be successful with a robust nibble site acquisitions in the right location within the higher margin PBSA sector that they can deliver and finance with an average 20% profit to the bottom line
Their biggest challenge is it can take up to two years to secure planning permission for a development site.

[goodpick] 04/3/2023 07:20

Recommend anyone who hasnt listened to this to do so - very informative and the medium term outlook is encouraging.

https://www.youtube.com/watch?v=4I8p2iwvE84

[bend1pa] 02/3/2023 16:18

Until interest rates show signs of peaking, WJG's sp, in common with those of house-builders will stay in the doldrums.Just had a warning from the BoE that interest rates will increase further, so no sign of relief yet.