Watkin Jones Share Discussion Threads

[dround87] 14/1/2020 08:35

Amateur hour selling 16.5k shares at 235 lol

[rat attack] 14/1/2020 08:22

Just received email update from Equity Development and summary as follows:

What makes a great stock? Well according to legendary investor Warren Buffet, it is buying a “wonderful business at a fair price”. A maxim that we believe rings true for Watkin Jones, who today issued another positive set of results.

FY19 turnover climbed 3.2% to £374.8m (£363.1m LY), with the dividend hiked 9.9% to 8.35p (7.6p LY & 2x covered), reflecting robust cashflows and closing net funds of £76.8m (£80.2m LY), equating to 30p/share.

Elsewhere gross profits rose 6.0% to £76.8m (margin 20.5%) with student accommodation delivering the lion’s share at £51.6m (vs £60.7m LY), but ably supported by Build-to-Rent (£13.2m vs £1.0m LY), residential housing (£7.7m vs £4.4m) and Fresh lettings (£4.6m vs £4.5m). EBIT margins ticked up too, to 14.0% (13.7%) thanks to tight cost control, with adjusted EPS climbing 4.6% to 16.7p (16.0p).

I guess we shouldn’t be surprised though, since the adjusted 29.9% RoE (FY19 average) far exceeds WJG’s cost of capital, mirroring its capital-lite model, 1st class execution and the secular tailwinds underpinning its two core markets of PBSA and BtR.

Indeed we believe disciplined capital allocation is a key theme that is unlikely to change anytime soon, given the extensive experience of the executive team, and the careful guidance offered by the Watkin Jones family (18% stake).

Going forward, management see plenty of opportunities, on the back of a chronic shortage of UK housing, increasing business confidence, a ‘Golden era’ for BtR, low interest rates and a catchup in investment after December’s General Election.

We keep our FY20 forecasts and 300p/share valuation unchanged, but look forward to further news as the year progresses.

[rat attack] 14/1/2020 08:17

Not an overwhelming market reception, but a robust performance and and an above expectation dividend - 5.6p against 5.5p I expected. Reasonably happy!! On ex cash basis looks steady, but these broker prices look like 12 month forward targets given ex cash pe of 12.5.

[edmonda] 14/1/2020 08:13

Results look good: FY19 turnover climbed 3.2% to £374.8m (£363.1m LY), with the dividend hiked 9.9% to 8.35p (7.6p LY & 2x covered), reflecting robust cashflows and closing net funds of £76.8m (£80.2m LY), equating to 30p/share.

Elsewhere gross profits rose 6.0% to £76.8m (margin 20.5%) with student accommodation delivering the lion’s share at £51.6m (vs £60.7m LY), but ably supported by Build-to-Rent (£13.2m vs £1.0m LY), residential housing (£7.7m vs £4.4m) and Fresh lettings (£4.6m vs £4.5m). EBIT margins ticked up too, to 14.0% (13.7%) thanks to tight cost control, with adjusted EPS climbing 4.6% to 16.7p (16.0p).

Equity Development keep FY20 forecasts and 300p/share valuation unchanged, and look forward to further news as the year progresses. For full detailed note, click here:

[rivaldo] 14/1/2020 08:10

Peel Hunt retain their Buy and 280p target:

[primarch1] 14/1/2020 07:43

Impressive btr growth the potential of this to the bottom line will be significant if it keeps growing at this pace.

[rivaldo] 14/1/2020 07:32

Great to see both 16.7p EPS and the 8.35p dividend ahead of consensus expectations.

There's also a £77m cash pile. The ex-cash P/E remains pretty decent value, especially considering the very confident outlook and the successful start to BtR.

The amount of forward sold developments, plus the ever-increasing pipeline, mean that investors can have a great deal of faith in the performance going forward.

[dround87] 14/1/2020 07:27

When is outlook anything but haha! Revenue maybe a little short but profits and margins doing well. Cash and divi growing. Not exactly doom and gloom.

[effortless cool] 14/1/2020 07:13

It's a miss and, although the outlook statement is quite optimistic, I expect a down day.

EDIT: I take it back, adjusted EPS was ahead of forecast, although revenue was below. Statutory profit fell and £2.6m payment to new CEO is quite outrageously high.

[skinny] 14/1/2020 07:04

.

Financial Highlights

· 3.2% increase in revenue to £374.8 million (FY18: £363.1 million), underpinned by student accommodation development and benefiting from strong growth in build to rent ('BtR') revenues.

· 6.0% increase in gross profit to £76.8 million (FY18: £72.4 million), reflecting a robust gross margin of 20.5% (FY18: 20.0%).

· 4.5% increase in adjusted profit before tax2 to £52.3 million (FY18: £50.1 million).

· 9.9% increase in dividend to 8.35 pence per share, with a final dividend of 5.6 pence per share, fulfilling our previously stated policy of moving to a dividend twice covered by adjusted earnings.

· £17.6 million net cash inflow from operating activities (FY18: £54.4 million).

· £115.6 million gross cash at the year end (FY18: £106.6 million) and £76.8 million net cash (FY18: £80.2 million).

· 29.9% adjusted return on equity3 (FY18: 33.2%), reflecting the Group's capital-light business model.


more.....

[skinny] 13/1/2020 16:59

I thought he meant Dividend Per Share?

[alan@bj] 13/1/2020 16:56

EPS (It's a typo)

[rat attack] 13/1/2020 16:32

DPS 8.25p?

[effortless cool] 12/1/2020 20:51

Consensus revenue £382.8m, EPS 16.3p, DPS 8.1p.

[clausentum] 12/1/2020 20:09

14 Jan 2020 Preliminary Results for the year ending 30 September 2019

[cordwainer] 08/1/2020 13:35

.. or a tenant with no lunch money for the rest of the week.

[skinny] 08/1/2020 08:05

Must be a mason :-)

[rivaldo] 08/1/2020 08:03

First trade today - 2 shares bought at 256p :o))

[rivaldo] 06/1/2020 11:32

Peel Hunt today reiterate their Buy and 285p target:

[skinny] 16/12/2019 15:57

That was intraday but academic now as it hit 250.50p earlier 🙄

[rivaldo] 16/12/2019 13:19

Is that intra-day? I'm just going by the thread header charts.

[skinny] 16/12/2019 12:27

Not quite! 248p is the ATH.

[rivaldo] 16/12/2019 12:25

New highs now.

[cordwainer] 12/12/2019 19:29

Watkin Jones 75 homes development - not exactly frictionless:

www.cheshire-live.co.uk/news/chester-cheshire-news/road-closure-means-more-misery-17287806