Watkin Jones Share Discussion Threads

[alotto] 04/6/2019 16:32

Thanks guys

[alter ego] 04/6/2019 16:15

BBC news article on Woodford

[killing_time] 04/6/2019 16:10

He holds WJG in his income fund.
But its just been suspended as people are taking money out so quickly that he has to sell shares in the companies he holds, so the likes of BUR and NRR are dropping as either hes selling them or people think hes about to sell them so dumping them first. Lots of bargins in the short term as he has to sell, hope this helps.

[alter ego] 04/6/2019 16:10

Neil Woodford's Equity Income fund has been losing value and people have been taking their money out forcing him to sell stocks the fund holds. That seems to be hitting share prices even though many of the companies he holds are not the problem. It's the duds he holds that are responsible for the fund's poor performance but now even the good companies are seeing their share prices hit because he needs to sell them to pay back his investors.

[alotto] 04/6/2019 15:59

what does "woodford related" mean?

[killing_time] 04/6/2019 15:53

Think so, hope so as iv just started buying.

[penpont] 04/6/2019 15:50

Is the fall Woodford related?

[davemac3] 04/6/2019 15:44

would be useful if they disclosed the performance targets for the share options

[rivaldo] 03/6/2019 14:21

Worth remembering that even looking forward to the Sept'20 year end there is already 80% visibility for the student pipeline, and we're likely to get positive news flow soon re the new plans for the BTR investments.

The forward P/E is now only 12.5, and less when the cash pile is removed.

[quepassa] 30/5/2019 15:49

watch the news today......plans/discussions afoot to 1) REDUCE student tuition fees, 2) re-introduce student maintenance grants and 3) to extend repayment duration of student loans from 30 to 40 years........all being proposed with view to reducing exorbitant costs of being a student in the UK.


who knows but it cannot be ruled out that the next governmental levers to be used to cheapen the massive expense of going to uni nowadays may or may not be that present/future governments look at regulating student rents...


as i mentioned before, the political risk in the property rental market is in my opinion augmenting exponentially all the time.

just look how the residential property market has been knocked for six in just the last few years:-


they killed Buy-To-Let

they put a lead anchor on overseas purchases/company purchases of UK property

they put an astonishing SDLT tariff of 10% on property over £925k and 12% over £1.5m which has effectively stopped the top-end property market dead in its tracks ( which I consider to be a sneakily introduced by the back-door Mansion Tax to all intents and purposes)

and you can add another 3% on top of those humongous SDLT rates if it's a second property

as an asset class, residential RENTAL property is highly likely in my opinion to be further impacted in a negative way by the potential spectre of rent-capping and the abolition of landlords' rights to vacate properties known as abolishing no-fault evictions.

tough sector.

good luck all.

all imo. dyor.
qp

[2vdm] 30/5/2019 15:13

All good points, but students are demanding better accommodation. Looking forward to next report on the BTR programme too.

[alotto] 30/5/2019 14:27

saturated of accommodations or students?

[swiss paul] 30/5/2019 14:11

Or is student accommodation market becoming close to saturated

[quepassa] 30/5/2019 13:48

and a much increased scrutiny on student visas being granted by the government combined with universities being required to vet student applications more closely.

[alotto] 30/5/2019 13:31

if Brexit doesn't put them off from studying and possibly afterwards working in the UK then yes.

[2vdm] 30/5/2019 13:08

SP down about 5% due to market sentiment. Buying opportunity perhaps.With 15% fall in £ must be cheaper for overseas students to study here.

[rivaldo] 29/5/2019 12:05

From Shore Capital today on build-to-rent re Telford Homes:

"BTR is, in our view, still firmly a growth market and this, plus the low risk and capital-light structure, generates a higher quality of earnings than sales made in the open market segment. Where house builders undertake a mix of tenures in their development profile, we believe that higher ratings are typically secured. BTR also allows for a stronger balance sheet and should result in more generous dividends for shareholders."

[skinny] 28/5/2019 11:18

Its free to register for a limited number of articles a month.

[shaker44] 28/5/2019 11:12

QuePassa, for all those without access to that article, are you able to sum up the implications for WJG please?

[quepassa] 28/5/2019 10:42

"The build-to-rent boom raises tough questions".

Excellent article by FT correspondent Pauline Skypala in the Ftfm section (page 9) of yesterday's FT edition.


ALL IMO. DYOR.
QP

[minerve 2] 27/5/2019 10:42

From the FT:

On the basis of current trends, the Centre for Housing Policy at York university estimates that by 2040 up to one-third of 60-year-olds will rent privately.

Government data show that at present just 4 per cent of pensioners and 8 per cent of those aged 55 to 64 live in privately rented accommodation.

The proportion of 25 to 34-year-olds who rent privately has been stable at about a third over two decades but has risen notably for 35 to 44-year-olds, from 16 per cent to about 25 per cent now.

______

One would expect many of the elderly would prefer apartments rather than the hassle and expense of a separate dwelling plus garden.

[edmonda] 23/5/2019 20:22

Richard Simpson, CEO, and Phil Byrom, Financial Director, discuss the group's interim results, the ongoing strength in their student accommodation division, and the opportunities in Build to Rent.

[rivaldo] 21/5/2019 13:51

Simon Thompson raises his target to 265p today:



"Watkin Jones primed for highly profitable growth
Simon Thompson

Half-year results from Watkin Jones (WJG:230p), a construction company specialising in purpose-built student accommodation (PBSA) and private rented housing, highlight why the shares have produced an average annualised return of 35 per cent since IPO when I suggested buying into this highly cash-generative company ('A profitable education', 3 Apr 2016).

Adjusted half-year pre-tax profits rose by 10 per cent to £26m to deliver an 8 per cent increase in underlying EPS to 8.11p and supported an 11 per cent hike in the payout per share to 2.75p. Analysts at brokerage Pell Hunt expect a full-year payout per share of 8.1p covered two times by forecast EPS of 16.5p, while Paul Hill at Equity Development estimates Watkin Jones will produce an eye-catching 44 per cent ungeared return on equity from its asset-light business model this year.

UK Purpose built student accommodation (PBSA) offers an above-average yield profile compared with other mainstream property asset classes, strong and stable performance both in terms of investment yield and occupancy levels, and a relatively low-risk income stream with the ability to capture annual rental growth. This greatly appeals to institutional investors, which is why all 5,329 student beds Watkin Jones plans to deliver in the 2019 and 2020 financial years have been forward sold or are in the hands of solicitors. The group’s PBSA development pipeline of 9,100 beds across 20 sites is worth £850m and stretches out to 2022. Importantly, current supply of 639,000 PBSA beds in the UK (Jones Lang La Salle estimate) is well below the 750,000 intake of first year and international students, so new stock can be easily absorbed into the market. University applications for the 2019/20 academic year are on the up too, a reflection of the fact that the UK has 12 of the world's top 100 universities.

Watkin Jones is also growing its Build-to-Rent (BtR) activities and has now secured eight sites to construct 1,800 units for delivery in the next four years to meet institutional demand. Unibail, PSP, L&G, Aberdeen Standard, M&G, and Invesco are all increasing their exposure to this asset class, attracted by the UK’s ongoing population growth (the UK's population is forecast to grow by 7.5m by 2035), the urgent need for additional rented accommodation and attractive investment yields (4.25 per cent in prime regional sites). Watkin Jones’ board continues to explore the possibility of creating a separate investment vehicle to accelerate development of this business, acting as asset manager, and retaining a minority stake. Expect news on this front by the year-end.

With the benefits of a capital-light and forward-funded business model, analysts expect closing net funds of £90m (35p a share) by 30 September 2019, rising to £101m (39.5p) a year later. On this basis, the shares trade on a modest cash-adjusted PE ratio of 10 and offer an attractive prospective dividends yield of 4 per cent for the 2020 financial year. The shares are worth buying and I am raising my target price from 250p to 265p. Buy."

[bestace] 21/5/2019 12:48

I'm still not convinced by the BTR segment. It looks like all the revenues and profits this period were on the Reading and Wembley sites where WJG are just the building contractors on someone else's property.

That's fine as far as it goes, but the key differentiator with WJG is supposed to be the forward-selling model and as far as I can recall they have not yet managed to forward sell any of their owned BTR sites, which perhaps implies that the viability issues I posted about previously (as disclosed in the records on the planning portals) are more than just negotiating gambits to minimise the affordable housing element of those planning applications.

And there was no mention of the Uxbridge BTR site, which from looking on Hillingdon Council's website, had planning permission refused back in March. At the finals in January they described Uxbridge as a "significant development site", the securing of which was a "notable event". If it was that significant and notable, shouldn't the planning refusal have merited at least a passing comment in today's announcement (or for that matter in last month's trading statement given that the refusal would have been known to them at that time)?

Surely they have to demonstrate that the forward selling model also works with BTR before they can set up a fund and tempt outside investors?

I'd be very happy to hear any counter-views.

edit - I see in the presentation accompanying the results (page 31) that they are showing 616 units out of the c.1800 unit pipeline as having been forward sold for delivery in FY21, which appear to be the sites at Reading (315 units) and Wembley (300 units). It seems somewhat misleading to me to describe those sites as forward sold when they were never WJG's to sell in the first place.

[edmonda] 21/5/2019 09:34

Agree with your summary, OXMAN, update reads nicely and Board 'remains confident in prospects' as evidenced by dividend increase.

New Equity Development note just out with forecasts retained, as is 250p sum of the parts fair value. Research freely available here: