Watkin Jones Share Discussion Threads

[jockthescot75] 18/4/2023 14:05

disco - point made I think. I think we all understand, but the point is laboured now.

[goodpick] 18/4/2023 13:02

Jock thanks - very encouraging
Not surprising with rental growth and other property classes like commercial struggling.

[jockthescot75] 18/4/2023 11:19

Deals starting to happen again. And this is in London where there are lower yields on cost for investors.

[hybrasil] 18/4/2023 11:00

Todays news shows that contrary to the telegraph reports that another rise in rates is on the way.
Any purchaser of Wjg s products will have to take that into account in their pricing

[christw1234] 18/4/2023 10:44

Hybrazil
The problem is the Liquidity in the market to build them profitable if they could achieve this then would sell them for sure
The Mark Watkin Jones business model was built on low-interest rates and land values, it's a totally different ball game today

[hybrasil] 17/4/2023 12:28

This is an exceedingly risky business which by its nature only has a few transactions in any one year. If one or two or three do not happen (and we know the situation as to two)then its a material problem.

Its all about interest rates .Philip Lane of the ECB says they are going up again.

Yes it will turn and yes there is a huge demand for for student accommodation and rental properties but the model here is to build and sell those assets and they are having admitted difficulty selling.

May won't be pretty but its October I would be worried about

EDIT

Since I posted I have just noticed the Telegraph report (now about 5 min old) to the effect that interest rates have peaked

[rcturner2] 16/4/2023 19:41

It means that things that would normally be in H1 will end up in H2.

Lots of companies say things like this in times of trouble. Only time will tell whether it actually happens like this.

[hsduk101] 16/4/2023 12:56

Hi all, to note im not a shareholder.

In their trading update what does: "
-- As previously flagged, performance will be materially H2 weighted." mean?

Is this forward looking to include potential cash from a future period, or is it comparing to H2 from 2022?

If the weighting was taken out, what would be the guest-imated Gross and Net Cash

[podgyted] 15/4/2023 18:12

The May figures are only a month away and it would appear prudent to wait. Their TU did leave me with the impression that H1 was going to be awful.

[christw1234] 15/4/2023 06:55

Unfortunately due to the present banking turbulence liquidity in the bricks and mortar development sector is not what it was in 2022.
Crosslane student accommodation development going into administration won’t Help sentiment in this market.
Further to fall after the May figures I’m afraid

[disc0dave45] 14/4/2023 15:02

Probably the right approach, can get too focussed at times on daily moves.All the best

[srpactive] 14/4/2023 13:26

I just continue to nibble, super yield 8% will do me.

If they take two years to get back to 150p, I am quite willing
to wait, even if it takes ten.

I am a longer termer.

dyor

[disc0dave45] 14/4/2023 13:18

"Subsequently, we inflate the tender"And keep losing the work, good move!.

[farnesbarnes] 14/4/2023 12:55

Goodpick,

Re: 2. Watkin Jones have always used subcontractors - i know as i used to work there, so they arent getting cheap and desperate.


Sub-contract office roles though? Every large site in the world subs out packages to respective niches, but the estimators and QS's? As one of their suppliers, we know full well when we're being used as a yardstick with zero chance of winning the order. Subsequently, we inflate the tender.

[hybrasil] 14/4/2023 12:12

bend1pa.

I totally agree with your sentiments on the AIM market - I tend only to invest in it as I can understand the numbers. I get lost when you start going in to the hundreds of millions. So many companies are I believe underrated at the moment yet you are not getting the range of buy outs -private equity or otherwise- that I thought would follow the massive value being presented.

Now as to your views on WJG -mmmm.

[bend1pa] 14/4/2023 11:56

You can talk this share down as much as you like.

Bought a few yesterday. Quite happy to keep adding at this level or lower. Don't know if the div will be sustained in the next few years. At the moment there's no reason why it would not be at 8.0% yield. But even if they cut it by 25% it would still be considerably higher @ 6.1% than any cash term bond - a 2 year fixed rate ISA bond with Nationwide is currently 4.25%.

Did I read that they currently have £83 net cash, so WJG is not in any immediate danger of going bust. It seems that most AIM stocks are being hammered at he moment, and some of them like this one, unfairly. We'll just have to wait for some confidence to return to the AIM market, which it must do at some point.

[hybrasil] 14/4/2023 09:13

Cordwainer.

I never place any reliance on "paid for" research.

I suggest you look back at the optimism expressed by them when the price was considerably higher.

[trader465] 14/4/2023 03:13

“one or two people trying to talk the price down”

Wouldn’t it be wonderful if one could “talk” a share price up or down at will. Can you explain to me how this talking it up and down works?

[cordwainer] 14/4/2023 02:26

Sure, the share price could get squeezed more if no new contracts are announced in the next few months, not to mention one or two people trying to talk the price down for a quick steal.

But as the (ever upbeat) Progressive Research just said in it's latest note on WJG: "Five schemes are either formally under offer or expected to reach preferred bidder status shortly. We believe these include the two projects deferred in the wake of the mini-budget."

If any one of those gets confirmed then likely to see £1+ again. But I would also be surprised to see such an announcement before inflation and interest rates have started to ease.

There also appears to be strong technical support at 80p (that's a historical and forward PE of about 5.3 by the way).

[alotto] 13/4/2023 22:46

56p!? That is a further 35% drop. That's gonna happen only in the event of a catastrophe. 70p could be a realistic wishful entry point. But I doubt we will see that either. 75-80p should be a decent entry point.

[disc0dave45] 13/4/2023 20:29

hybrasil "I may yet get my 56p?"Very much doubt that....likewise your rough 63p!, this is already at an all time low, shouldn't be too greedy.....that said I'll back the lorry up if it does hit 56.

[goodpick] 13/4/2023 20:16

First half performance has been driven by our contractually secure forward sold developments which are on site. Project margins have been in line with the updated guidance given in January, with the exception of our scheme in Exeter where the Group has incurred certain additional costs following the liquidation of a contractor.

Few points:

1. Project margins are in line with expectations apart from Exeter. This is hopefully an one off rather than an underlying market thing.

2. Watkin Jones have always used subcontractors - i know as i used to work there, so they arent getting cheap and desperate.

3. Full year always has higher cash than half year as the business operates on a cycle. With a lot of jobs finishing at the year end with cash being invested in jobs in progress mid year.

4. I dont know what evidence there is that staff keep getting younger - maybe this id the blend or the imagery from Fresh Property Group which is hospitality driven…without also sounding ageist.

[hybrasil] 13/4/2023 19:20

Melody

It is abundantly clear that they have not signed any contracts - or they would have to announce.

Disco

I may yet get my 56p?