Watkin Jones Share Discussion Threads

[nw99] 31/5/2016 12:04

Good yield as well

[tightfist] 31/5/2016 10:46

Hi Rivaldo,Thanks for the text paste. WJG looks promising, well priced in a tailwind sub-sector, and a useful business model.Cheers, tightfist

[its the oxman] 31/5/2016 08:45

Steady climb, still optimistic we could see c.120p with results, more if outlook is strong.

[rivaldo] 27/5/2016 08:47

I got hold of the entire Shares Mag tip as follows. The accompanying table shows forecast EPS and dividends of:

2016 : 12.1p EPS, 4p dividend
2017 : 13.4p EPS, 6.3p dividend
2018 : 15.0p EPS, 6.6p dividend

"Grab Watkin Jones for income

Student housing specialist’s business model should facilitate handsome dividends

Take a stake in student housing developer Watkin Jones (WJG:AIM) ahead of its
maiden half year results on 9 June. The company is a really interesting take on
the property market where developments tend to be pre-sold and forward funded by the buyer. That makes the £285 million cap an asset light, low working capital business.

Its business model has the potential to support attractive dividends over the coming years. Watkin Jones’ balance sheet is in a net cash position and Peel Hunt forecasts £43 million to be paid out in dividends over the next three years.

The company indicated at its IPO (initial public offering) in March 2016 that it intends to pay 4p per share dividend for the year to 30 September 2016. On a pro forma basis, it guided for 6% yield on the IPO offer price of 100p.

Peel Hunt forecasts 6.3p dividend for the year to 30 September 2017. That equates to a 5.6% prospective yield based on the latest share price.

Watkin Jones has developed almost 90 student housing blocks in the past 18 years, providing more than 28,000 beds. The group has very good earnings
visibility having pre-sold all of the units earmarked for delivery in 2016 and 80% for 2017.

The broker estimates that Watkin Jones will report a £38.6 million pre-tax profit in the year to 30 September 2016, rising to £42.7 million in the following year.

The UK has some 1.7 million students, most of whom live in private rental accommodation. This market is suffering from inadequate supply, which has pushed rents higher and creates opportunity for companies such as Watkin Jones
to provide an alternative.

The company has a pipeline of 10,000 beds in 27 schemes that are expected to complete over the next three years. ‘While companies like Unite (UTG), Empiric
Student Property (ESP) and GCP Student Living (DIGS) are all focused on student
accommodation, the bulk of their exposure comes from the rental income from their property investments rather than the development profits that Watkin Jones creates,’ claims Peel Hunt. ‘There is arguably a small overlap with
housebuilders in that the group finds, acquires and establishes planning on
property sites before building and selling the developments on. However, Watkin
Jones exposes very little of its own capital to this process without having an end property investor which provides forward funding for the scheme.’

FAMILY BUSINESS

Watkin Jones was established as a carpentry business in 1791 and has remained under control of the founding family for nine generations. Mark Watkin Jones is the current chief executive. The family and senior management own 50% of the
company, making it in their own interest for the business to do well.

Watkin Jones progressively moved into general construction projects, such as supermarkets, pubs, residential and student accommodation. The company started to focus on the current funding-light model of purpose-built student
accommodation after being forced to repay £150 million of debt to its bank when the financial crisis hit."

[rivaldo] 26/5/2016 09:33

WJG have been tipped today in Shares Mag - full page review, but subscriber-only:



"Grab Watkin Jones for income

Student housing specialist’s business model should facilitate handsome dividends
26 May 2016

Take a stake in student housing developer Watkin Jones (WJG:AIM) ahead of its maiden half year results on 9 June. The company is a really interesting take on the property market where developments tend to be pre-sold and forward funded by the buyer. That makes the £285 million cap an asset light, low working capital business. Its business model has ... "

[jonwig] 25/5/2016 17:15

David ... ahh, a long trip from the Northern Powerhouse alas!

[davidosh] 25/5/2016 15:53

jonwig.....If you come along on the 13th June to meet manageement then you should get all the answers. I like Mark Watkin Jones and he has always given me straight answers to fairly tough questions.

www.mellomeeting.co.uk

[jonwig] 25/5/2016 14:52

Thanks rivaldo - no problem reading it. I'm a free subscriber to that site, and tend to ignore their buy tips, but take a lot of notice when they smell a rat.

I added a comment at the bottom (awaiting approval) under a slightly different name.

EDIT - comment was removed. Strange, as it was a positive one. Though I did express some wonder why they were going public just now. Is that so offensive?

[rivaldo] 25/5/2016 14:16

Here's a link to the tip - I'm a registered user, so not sure if you can view it if you're unregistered:

[2vdm] 25/5/2016 13:17

Just been tipped by Malcolm Stacey on ADVFN a few minutes ago. I've got a friend who with his business partner have invested money into this sort of student accomodation. They are both smart operators and consider it a very reliable ROI, if done properly, in these uncertain times.

[someuwin] 25/5/2016 13:02

Bought a few today.

[rivaldo] 23/5/2016 11:04

I note that June's Mello Meeting at Sea Salt is with WJG (on Monday June 13th), so that should bring some nice added exposure for the company:

[its the oxman] 23/5/2016 08:03

Rise to test 120p on the cards?

[rivaldo] 22/5/2016 18:21

Excellent news - good to see the Mail picking up on good, solid companies recently (they've also featured KWS and IDEA).

I don't think anyone has posted analyst forecasts here at all yet? Anyway, here they are:

2016 2017
Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)
Peel Hunt LLP 20-05-16 BUY 38.63 12.12 3.98 42.70 13.40 6.28

A P/E well into single-digits, plus a huge divi yield, implies lots of potential upside here.

[nimbo1] 22/5/2016 09:14

That tip and upcoming results should see some interest here

[jonwig] 22/5/2016 08:57

Good stuff, nw.

At the demand end, two REITs (ESP, DIGS) have recently made oversubscribed equity fundraisings above NAV, and the largest in the sector (UTG) has another bond issue.

The last paragraph of the link shows that WTG are on the lookout for new avenues.

[eagle eye] 20/5/2016 08:45

Plenty of vacancies on their website 'due to expanding workload':

[rivaldo] 18/5/2016 08:29

I'd have thought this news was RNS-able? As an RNSNON at least.

Given that the decision was last night, perhaps we'll get an RNS later today or tomorrow morning.

[nw99] 18/5/2016 07:54

Nice post re Belfast thanks buying more first thing

[jonwig] 18/5/2016 07:21

Shows how WJG does business: builds, collects and moves on. Risk is carried by the developer/investor Lacuna which has a niche Belfast presence -

[rivaldo] 18/5/2016 07:11

Confirmation - Belfast Council approved WJG's plans last night:



"Belfast City Council approves two student housing schemes
By John Mulgrew
Published 17/05/2016

Two new student housing schemes in Belfast been granted planning approval at a Belfast City Council meeting on Tuesday evening.

Two buildings in the city centre were put forward for approval by Belfast City Council planners, including the 317-bedroom Swanston Hall on the corner of Queen Street.

The Victorian Athletic Stores building on Queen Street is being transformed into a new student development by Welsh firm Watkin Jones and Holywood's Lacuna Developments.

etc"

[rivaldo] 17/5/2016 14:58

Looks like good news coming for WJG this evening:



"Plans for another 700 student beds in Belfast set for green light
SIMON CUNNINGHAM
17 May, 2016 01:00

ANOTHER two major student housing schemes in Belfast are due to be given the go ahead by the city council this evening.

Planners have recommended that the green light be given to proposals to develop the former Athletic Stores building and another project at Little Patrick Street.

Together, the developments represent around £34 million of investment and will provide accommodation for around 700 students.

The £16m plans to turn the former sports shop on Queen Street to managed student accommodation is a joint venture between Lacuna and Watkin Jones.

The proposal will maintain the facade of the building which at one point had become the subject of a drive by heritage campaigners fearful it would be knocked down.

The development is part of a wider scheme by Holywood-based Lacuna and Welsh firm Watkin Jones which have also invested in the construction of student studios on the Dublin Road and the redevelopment of John Bell House.

Lacuna Development's managing director, Anthony Best said: "We welcome the planning officer's recommendation to approve our third development at the Queen Street. If approved this will complete our current £40m investment in the city.

"We are already on track to open the doors of John Bell House to student residents at the end of the summer, and are pleased to be working once again with O'Hare McGovern on our second development at Dublin Road.”

Mr Best added: "If planning is granted we would aim to be on site to start construction with a local contractor as soon as possible with the aim to be open in September 2018."

[rivaldo] 12/5/2016 08:32

Good interview here with Andy Hanson, the Director of Equity Research at Zeus Capital, about WJG.

He notes:

- 90% of this year's profit is already covered
- WJG are on a 20%-30% discount to the average rating in its sector
- and that's without taking into account the £36m net cash
- plus the 6% divi yield is pretty tasty