Watkin Jones Share Discussion Threads

[rivaldo] 21/5/2019 09:34

Peel Hunt have raised their price target to 265p (from 250p) and say Buy:

[its the oxman] 21/5/2019 08:37

Look positive results to me. Decent outlook , further growth to come and nice hike in the div.

[adelwire2] 21/5/2019 08:26

"I hate good news" says stock market

[rivaldo] 21/5/2019 07:45

Decent numbers, which would have been better but for the one-off introduction of IFRS15 which reduced profits by £613k.

Again, the cash pile has fallen as it usually does in H1, but would have been much higher at over £32m had it not been for £14m which was received in April 2019 (post period end).

Nice 11% increase in the dividend.

The outlook sums up the confidence given the high forward visibility:

"The underlying market dynamics for both student accommodation and BtR are strongly supportive of the Group's forward sale model, which combined with our pipeline of forward sold and secured development sites, continues to provide the Group with excellent visibility on future earnings and cash flow. Consequently, the Board remains confident in the prospects for the Group."

[alotto] 21/5/2019 07:39

The reduction in net cash for the period of £61.9 million reflects the
Group's normal annual cashflow profile which, depending on the timing of
forward development sales, sees a cash utilisation in the first half of the
year, followed by cash generation in the second half of the year as
development sites for delivery in future years are forward sold and the
significant final payments due on completion of the current year's
developments are received. In addition, the half year cash position was
impacted by a delay in the receipt of a contractual cash payment of £14.0
million, which was received in April 2019 (post period end) following the
completion of certain legal formalities relating to one of the Group's forward
sold student developments.

[alotto] 21/5/2019 07:17

What's your thoughts about the cash flow statement?

[alotto] 20/5/2019 16:02

I hope you are right Rivaldo

[rivaldo] 20/5/2019 09:52

Cheers Oxman. Results and analyst briefing tomorrow:



There's a preview here:



Conclusion:

"Underlying full year pre-tax profit is likely to be slightly higher than the £50.1m reported last year. Profit growth is likely to accelerate again next year.

At 232.5p, the shares are trading on 14 times 2019-20 prospective earnings, falling to less than 13 the following year. Little more than three years ago, Watkin Jones floated on AIM at 100p a share.

Given the strong demand for both student accommodation and build-to-rent, there are good long-term prospects for Watkin Jones. Given the strong balance sheet and dividend income, the shares remain attractive."

[its the oxman] 17/5/2019 09:00

Nice article Rivaldo, certainly a very possible outcome based on those figures, and to date wjg shows every sign of continuing to deliver.

[skinny] 17/5/2019 08:01

Well that worked!

[rivaldo] 16/5/2019 22:38

Tipped tonight in a long article by Master Investor - and it doesn't even mention the £80m cash pile, which reduces the P/E still further:



Conclusion:

"Broker estimates suggest that the current year to end September 2019 will see revenue up £28m at £391m and pre-tax profits coming out at £51m, giving some 16p in earnings and 8p in dividend per share. The 2020 year could well see sales of £433m and profits of nearly £56m, worth 17.75p of earnings and 8.7p in dividend per share. Already, with various developments projected and pre-sold, even further out estimates suggest that revenue could reach £620m in five years-time, pushing profits up to over £75m, with earnings ranging around 24p per share.

At the current 225p the shares of Watkin Jones trade at just 14 times current year earnings and a mere 12.7 times prospective earnings. And just a few years out and 24p of earnings would take them down to 10 times earnings. This is a quality stock that is about solid growth and I see the shares heading to 300p with relative ease."

[its the oxman] 16/5/2019 09:17

Chart looks ready for a good run higher if results please.

[rivaldo] 15/5/2019 10:53

Good to see Belgians investing here :o))



His main thesis on WJG is very detailed and worth a read:



Conclusion:

"Takeaways

In my base scenario, investors who now load up on the shares will enjoy FCF yields of 13.3% by 2028, whereas on a cash-adjusted basis that figure skyrockets to 42.8% as the company keeps at least half of its free cash flow inside. In other words, Watkin Jones' shareholders will benefit from the incremental compounding effect of growing cash flows and a mounting cash pile.

I believe an annualized dividend growth in excess of 6.63% (equal to revenue growth) is quite reasonable for the next 10 years, considering the undisputed reputation of delivering schemes right on time while capturing additional management fees after completion.

In essence, my investment thesis boils down to the fact that Watkin Jones has cash flow visibility, will enlarge its exposure to BTR, might forward sell assets to an investment vehicle and this move would accelerate Watkin Jones' growth and thus create a much larger and stable scope for its activities.

As a result, Watkin Jones' reputation will continue to strengthen, allowing for potential multiple expansion (a lower risk premium courtesy of the company's defensive and predictable business profile since it also forward sells developments). Most importantly, the company is operating a non-cyclical business with consistent growth in student applications and a significant crunch in supply and demand. It's not unrealistic that the group will pay out special dividends, but share repurchases would be a more effective way of enhancing total shareholder returns. I rate the shares a strong buy with upside potential of at least 57% based on a WACC of 7.83%"

[skinny] 15/5/2019 09:21

They are in the sector.

[johnveals] 15/5/2019 09:10

Can anyone shed any light on why WJG is classified as a “financialR21; stock?

[alotto] 14/5/2019 10:13

Guys let's not forget the half year results due in one week from today.

[adelwire2] 07/5/2019 13:05

Good points moneyweek

[rivaldo] 07/5/2019 11:01

Two new tips for WJG :o))

Colin McLean of SVM Asset Management highlights picks eight promising stocks for investors to buy for the long term:



"Student housing is a growth area

The property sector includes a number of specialist niches, such as student accommodation. Students now demand a high-quality overall university experience, and to provide this universities must work in close partnership with developers and managers of student accommodation. Investing institutions, including overseas pension funds, find the long-term nature and stable occupancy of these properties attractive. Listed companies in this sector include Unite Group (LSE: UTG)and Watkin Jones (Aim: WJG). Watkin Jones is also diversifying into providing private rented accommodation for young people as they move into work."

And:



"Other traditional sectors such as property are also being forced to address millennial needs. Students now demand a good overall university experience, and accommodation is a key part of this.

Universities need to work in close partnership with providers of student accommodation to enhance the experience and operate efficiently. Listed companies in this sector include Unite Students and Watkin Jones.

Watkin Jones is also betting that some of its skills can be put to work in private rented accommodation; building and managing flats for young people. There is a demand for a modern renting experience."

[alotto] 01/5/2019 16:19

Dave I wish but I doubt it. It looks like it is going to stagnate until the reporting date, which I understand is going to be 22nd of May.
Depending on the news the share price may move.

[davemac3] 01/5/2019 09:02

is there a cup and handle forming?

[alotto] 25/4/2019 14:09

Results days always make me nervous and give me a sleepless night.
I expect them to be in line with the company's forecast but I'd rather see them exceeding expectations.

[clausentum] 25/4/2019 13:50

Hopefully the results in 4 weeks will improve sentiment:

21 May 2019 Half Year Results for the six months ended 31 March 2019

[alotto] 25/4/2019 13:23

It hasn't moved much in a while now..