Watkin Jones Share Discussion Threads

[rivaldo] 12/4/2018 14:44

Because yesterday there was a seller in the market and today there are buyers?! Because people have now read the IC article and are reacting? Who knows....

Such questions are pointless - no-one will be able to answer definitively. If you're confident in the company - as I am for one - then just hold and wait.

[adelwire2] 12/4/2018 09:26

Gd to see but why today not yesterday with the excellent IC recommendation

[its the oxman] 12/4/2018 09:15

Showing a bit of life today, almost 200p again. More to go here.

[adelwire2] 11/4/2018 10:48

"Robust" trading statement

[dov] 11/4/2018 10:25

No reaction in the price to that unfortunately

[rivaldo] 11/4/2018 10:11

Tipped by Simon Thompson in the IC:

"Watkin Jones (WJG:190p), a construction company specialising in purpose-built student and private rented sector (PRS) accommodation, has issued a robust pre-close trading updated ahead of its half-year results on Tuesday 22 May 2018.

The company has a pipeline in excess of 9,800 student beds, of which 88 per cent have planning consent. All 3,415 beds scheduled for delivery in the 12 months to the end of September 2018 have been forward sold, which underpins Peel Hunt’s forecast that revenues will rise by 15 per cent to £345m and boost pre-tax profit by 9 per cent to £47.8m in the period. On that basis, expect EPS of 15.2p and a 10 per cent hike in the dividend per share to 7.3p.

Importantly, the pipeline is equally robust as Watkin Jones has already forward sold all 2,675 beds at five of the seven schemes in development for delivery ahead of the start of the 2019 academic year. It’s also actively marketing a number of schemes to institutional investors for delivery ahead of the 2020 and 2021 academic years, and reports strong demand, adding weight to analysts’ forecasts of a further ramp up in revenue to £413m in 2019 and £478m in 2020. The company is developing five build-to-rent residential sites, too, another lucrative source of income. On that basis, analysts at Equity Development and Peel Hunt expect EPS and dividends per share to increase to around 16p and 8p, respectively, in the 2019 financial year, rising to 17.6p and 8.6p the year after.

True, the shares have drifted slightly since I last advised buying at 207.5p ('Six small-cap plays', 22 Jan 2018), having first recommended buying at 103p when the company floated on Aim ('A profitable education', 3 Apr 2016). One reason for the pullback is because chief executive Mark Watkin Jones sold 1.5 per cent of the shares in issue at 195p in early March and is stepping down from his position, as I flagged up in January. However, the share sale was only made to facilitate the financial settlement of his divorce and the Watkin Jones Family still retain a hefty 27.6 per cent stake, aligning their interests with those of outside shareholders.

Moreover, the shares offer a prospective dividend yield of 4.3 per cent for the 2019 financial year and are only rated on 10 times cash-adjusted forward earnings after stripping out a burgeoning cash pile that could be worth 25p a share by September. A trading buy."

[jonwig] 10/4/2018 16:17

@ rivaldo - 'expert at obtaining ...'. 100% record, I think.

[rivaldo] 10/4/2018 15:27

Cheers. I thought it was irrelevant as (a) WJG got the permission, (b) it's 36 beds as you say, and (c) it's assuming there will be further such developments of empty properties, which there probably won't be.

The approval is the salient point. WJG seem to be expert at obtaining these.

[jonwig] 10/4/2018 14:39

Thanks rivaldo, but see last para underlined, which you appear to have overlooked:

Bangor City Council objected to the development at Plas Llwyd Terrace on the grounds that the city is already suffering with an over population of student accommodation and there are many empty properties of this proposed type, further developments would exacerbate this problem.

Only 36 beds anyway!

[rivaldo] 10/4/2018 13:38

Another planning permission success....



"Planning approved for former Bangor nightclub and more student accommodation
Posted by The Bangor Aye | Apr 9, 2018 |

Student Accommodation

Planning permission has also been extended for the development of a 36 bed student accommodation by Watkin Jones Group, at the former Victoria Building Land, at Plas Llwyd Terrace, Bangor.

The site is located within 100m of Bangor High Street and the City centre; the former Victoria Buildings is located in an elevated position at the top end of Plas Llwyd Terrace, which contains a Gwynedd Council owned and managed public car park which is located directly to the front of the site.

All buildings on the site were demolished several years ago and the site is currently vacant, planning for the development was originally approved in 2013 but has now been extended for a further 5 years until 2023."

[adelwire2] 06/4/2018 11:30

Jeffries £2.50.

[jonwig] 06/4/2018 06:47

Citywire:

Jefferies backs Watkin Jones management

An update from construction and development company Watkin Jones (WJG) has renewed Jefferies' confidence following the stepping down of the chief executive.

Analyst Anthony Codling retained his ‘buy’ recommendation and target price of 250p on the stock, which jumped 4.1% to 188.6p yesterday.

‘The price of Watkin Jones shares have fallen by 20% since the announcement of its full-year results on 15 January,’ he said. ‘The financial results were a touch above our expectations, but came with the announcement that the chief executive had decided to stand down.’

He added that its update ‘underpins our confidence in the bench strength of the team’ despite still awaiting news of the succession plan.

‘It seems to us the understudies have learned their trade well and the first act of 2018 was a powerful one,’ said Codling.

[jonwig] 05/4/2018 14:31

@ rivaldo - thanks for reminder. I think I missed that RNS!

[2vdm] 05/4/2018 13:59

rivaldo, thanks,you are correct and I completely forgot about that.Hopefully once the new appointment issue is resolved this will recover swiftly. I'll top up on the dips having bought quite a lot more in the 170s to add to my LTHs.

[jamieb73] 05/4/2018 13:33

I have topped up. If it breaks 200 I can see no reason to then go beyond 225...

[rivaldo] 05/4/2018 12:38

To clarify, MWJ has already sold £7.5m of shares back in March "to facilitate final settlement of divorce proceedings". His remaining 3.825m shares "are subject to a lock-up expiring in 180 days", so even if he does want to sell any - which I doubt - it's really not a problem for some time to come.

Hopefully the CEO succession will be resolved fairly soon given its commencement in mid-January, so this may give a further boost to the share price.

In the meantime today's statement should see the price move back upwards, well beyond 200p for starters.

[2vdm] 05/4/2018 11:46

I agree greyingsurfer. The key things on this single issue will be 1) who is his successor and will MWJ stay on to guide him in and or become a non-exec director and 2) as jonwig said above, will he be forced to sell shares to fund a divorce settlement.

[greyingsurfer] 05/4/2018 09:44

I think the only thing we, as investors, need to know about Mark WJ's retirement is that it is clearly for real personal reasons. There is no suggestion from any direction that he is leaving to "spend more time with his family" i.e. been pushed.

Anything beyond that is his business and I really don't see any merit in getting involved in speculation about his personal life.

Peter

[jonwig] 05/4/2018 09:01

@ Que Passa - it seems to be public knowledge that he is or was in divorce proceedings. I don't know how relevant that is, but it could be that fear of share sales in settlement is holding back the price.

He doesn't strike me as the driven kind of CEO who craves riches and recognition: after all he did inherit the family business and may have an absorbing hobby.

[quepassa] 05/4/2018 08:48

Re 1404.

He does seem a young man to quit as CEO of such a successful family business.

likely at his age to get bored very soon in my view if he withdraws from the cut and thrust of business life.

What's better? To be remembered as "The Boy from Bangor" or the "Billionaire from Bangor". - Now that would be something worth holding out for.

Come on, where are those cojones?

In my opinion, he's crazy to quit as CEO of this golden goose of a company.


Strong Trading Update.


ALL IMO. DYOR.
QP

[edmonda] 05/4/2018 08:35

H1 update reads nicely - full ED update research now published reaffirming forecasts and fair valuation at 225p / share.

Freely available here :

[rivaldo] 05/4/2018 08:29

Peel Hunt reiterate their Buy and 230p target:

[11_percent] 05/4/2018 08:27

They won't be able to hold it down indefinitely.................but they can scam it long enough to bankrupt us....

[jonwig] 05/4/2018 08:22

They seem to be in no hurry to test the market in PRS by selling on properties, which they intend doing when a substantial profit can be made. Let's hope they are reading that market right.

@ irenekent - I suppose they would point out that it's a "trading" update, but it's true replacing CEOs is often very quick: the seat is still warm!

[2vdm] 05/4/2018 07:57

They won't be able to hold it down indefinitely as it's a money making, cash positive dividend paying machine with clear objectives and an experienced BOD. As long as it remains so,and there's certainly no reason to see why it shouldn't, the pressure will be on share price to head north. Just my view but as a LTH,I have been adding at these levels.