Watkin Jones Share Discussion Threads

[jonwig] 19/1/2018 08:19

So they are moving the AGM to London. Kremlin watchers will be asking, "What do they mean by that?"

Conspiracy theorists might say there will be a few million shares to tout around institutions soon enough. To which the response might be, "Rubbish."

[rivaldo] 19/1/2018 07:19

Excellent news for WJG - permission given for a big 430-bed student housing development in Belfast::



"New £20m 430-bed student development approved by Belfast City Council
18 January, 2018 01:00

PLANNING permission has been granted for a new 430-bed student housing development close to the new Ulster University campus in Belfast.

Belfast City Council's planning committee formally ratified the application for the site at Little Patrick Street last night, with completion on the major project expected by August next year.

The £20 million development is a joint venture between Lacuna Developments and Watkin Jones, who purchased the site last year from UniCiti. In a statement the developers expressed delight the proposals have now been approved.

"This scheme will help meet ongoing demand for well-located high quality managed student accommodation. The proposals are part of more than £100 million of investment that the partnership of Lacuna Watkin Jones has invested in Belfast. We look forward to delivering a high quality, and well managed scheme in this part of Belfast city centre. The area surrounding our development will continue to transform as Ulster University's regeneration is completed. We look forward to continuing our positive working relationship with Belfast City Council and bring forward further investment and development in the city, contributing towards the city's growth ambitions".

etc"

[quepassa] 18/1/2018 14:04

Upbeat Note just issued this lunchtime by Equity Development.

Titled " Excellent end of term report".

Also an interview by Equity Development is taking place today with CEO Mark Watkin Jones and Philip Byrom CFO. Let's hope a transcript or recording of interview follows.


ALL IMO. DYOR.
QP

[santangello] 16/1/2018 13:25

.....and look who's just added :)

[clausentum] 16/1/2018 12:09

IMO the thing that concerned investors was the very large family holding, and whether the resignation of the CEO would affect the rate of disposal of that holding.

[flagon] 16/1/2018 10:07

4.4p divi
xd 25/1
paid 28/2

[petersinthemarket] 16/1/2018 10:04

cannot find a div payment date - anyone else found it? pete

[paleje] 16/1/2018 09:46

Agree with shaker on this, although everyone's entitled to privacy and I hope it isn't health or family reasons but he has been key to the business success and does have a big holding. PH's target is hardly comforting.

[santangello] 16/1/2018 09:39

Could not agree more strongly compnews1, plenty of knicker wetters around at the moment, but not the observers, commentators, Institutions etc........quite staggering to be honest.

[compnews1] 16/1/2018 08:22

Over reacted. The CEO is still on the non-exec board. The Company has sound business strategy, excellent PROFIT record.

[shaker44] 16/1/2018 06:49

I think a clarifying rns is needed very soon despite Peel Hunt view.

[jonwig] 16/1/2018 06:26

Citywire:

Construction and development company Watkin Jones (WJG) has delivered record results but they were marred slightly by the announcement that chief executive Mark Watkin Jones is stepping down, says Peel Hunt.

Analyst Gavin Jago retained his ‘buy’ recommendation and target price of 230p on the stock, which tumbled 10.2% to 203p yesterday.

‘The group has reported record results with a 13% increase in earnings, in line with expectations,’ he said. ‘The student development business is supported by strong forward sales while build rent is starting to contribute with a growing pipeline,’ he said.

‘In a separate announcement, chief executive Watkin Jones is intending to stand down once a suitable successor has been appointed. The shares trade on a 2018 price/earnings of 14.6x with a 3.3% dividend yield and the group’s growth prospects remain strong.’

[shaker44] 16/1/2018 05:40

Interesting post Jonwig. Thank you.
My initial thought was that market over reacted as ever. But the exit is being badly handled in my view. CEO only 50. Personal reasons unstated. If health, say so. If he wants to start a new business say so. Not leave market to assume worst. Family own £160m. If not going to sell off lumps, say so. If definitely gonna stay as a non exec, say so. Looking like a sell to me. Shame

[jonwig] 15/1/2018 16:25

Que - are you being disingenuous?

In business terms, equity and debt are "capital employed", sure. In accounting terms, far from it. (Ask Carillion.)

Why, in a net cash position, would a company take on long term debt for which it has no need, on its current business model? I've given the answer and so has the company: it wants to become a speculative property development company.

What's important is not whether that is true or not (it obviously is) but whether it's a good thing. Some investors such as yourself will think so, others will have doubts.

Incidentally, today's price action may bear this out - initial fall due to CEO news, rally, then another fall on closer reading.

I'm being neither bearish nor bullish here, and each must have his/her view.

[skinny] 15/1/2018 16:25

One of the heaviest volume days for a while and a reasonable bounce from the low.

[minerve] 15/1/2018 15:59

I think this is flattering the CEO. He's good but SuperMan he isn't.

[minerve] 15/1/2018 15:32

OK. I've just bought some more.

[minerve] 15/1/2018 15:23

What is happening here? Did I miss something?

[rivaldo] 15/1/2018 13:54

The IC are still buyers as per this article just out:

"Another impressive performance from property developer Watkin Jones (WJG) was marred by the news that after 15 years at the helm, chief executive Mark Watkin Jones is to step down for personal reasons, and the shares dipped 5 per cent on the news.

Revenue was boosted by a full-year contribution from Fresh Student Living, acquired in 2016, while 17 student accommodation developments were sold in the year to September 2017, providing 6,578 student beds. A further 23 sites providing 9,120 beds are in the pipeline, with 15 already forward sold.

As well as providing student accommodation, Watkin Jones is also developing its build to rent pipeline, and is working towards building around 1,500 units between 2018 and 2022. The first scheme was successfully completed in Leeds, providing 322 units.

Fresh Student Living has been integrated with the Five Nine Living brand and now has 16,082 student beds under management, up from 12,337 a year earlier, while it has also been contracted to manage 535 build to rent units.

Analysts at Peel Hunt are forecasting adjusted pre-tax profit for the year to September 2018 of £47.8m and EPS of 15.2p (from £43.8 and 14.3p in 2017).

IC View

Watkin Jones has a capital-lite business model whereby developments are forward funded by the ultimate owner. Student accommodation and build to rent are also two of the strongest sub-sectors in the property market. Despite the latest fall, the shares are still ahead of our buy tip (195.25p, 29 Jun 2017), and we’re still buyers."

[quepassa] 15/1/2018 12:15

It is considered imprudent to have high levels of short-term debt.

I think they once, several years back, had an challenge with short-term debt and have done absolutely the right thing by extending maturities away from short-term.

It is also a very positive sign that lenders are prepared to grant longer term-debt in recognition of the track record and future plans for the business.

Longer-term debt is considered prudent. And now is a great time to lock-in cheap rates.

The long term debt can be considered "capital" , debt capital. It's excellent. It underlines that they are a long-term business.

Personally, it seems absolutely the right thing to me to extend the maturity profile of their banking facilities. This allows them long-term planning and to match longer term projects against against longer term debt.


ALL IMO> DYOR.
QP

[jonwig] 15/1/2018 11:52

Looking at their financial position (£m, 2016 to 2017):

Cash ........ from 47.2 to 65.3
Short debt .. from 15.0 to. 1.5
Long debt ... from. 0.0 to 22.8

Why have they done this?
They have become, so far as the PRS goes, speculative developers.
The first Leeds development has been sold, but the others will be held on the books -

"We are therefore currently taking a prudent approach to forward sales, in anticipation of rising values in the build to rent market."

There can be no other reason for the long-term debt arrangements, which are typical of developer/renters. It's up to you to decide whether the potentially higher profits are at the expense of undue risk or not. Whether it's "prudent" or not. But there are risks, and this is a new direction away from the company they brought to market.