Half-year results for the six months to 31st March 2017 show gross profit up 24% to £29.1m (2016 H1: £23.5m).
Profit before tax was £21.1m, compared to a £9.9m loss last time (which was due to the costs of its initial public offering last year).
Revenue was £133.7m, which was down 8% on last time, but this was as expected and attributed to the timing of developments.
Gross margin for the half-year was 21.8% (2016 H1: 16.1%), reflecting the location and quality of student accommodation schemes in development, as well as a full six months contribution from Fresh Student Living, which was acquired in February 2016.
Ten student developments (3,415 beds) are scheduled for delivery next year (FY 2018). All sites are secured and have planning consents. Five developments are forward sold (1,854 beds) and the remaining five (1,561 beds) are in legal negotiation for sale.
A further nine student developments (3,545 beds) are scheduled for delivery in FY 2019.
Fresh Student Living now has 12,117 student beds under management, up from 8,310, and is contracted to increase to 19,532 beds under management by 2020
Watkin Jones’ build-to-rent development pipeline is also growing. It has a site secured with planning in Sutton, two further secured sites are progressing through planning in Belfast and Leicester, and three further sites are in negotiation for development subject to planning. These six schemes are targeted for delivery over the next two financial years.
Chief executive Mark Watkin Jones said: "We are very pleased to be reporting a strong set of half-year results. The group has seen good profit growth in the first half, driven by our student accommodation developments which are fundamental to the business. We are seeing increased institutional demand for good quality purpose built assets, and there are several new international funds that have entered the market recently, which highlights the continued attractiveness of the sector. Our forward sale model and student accommodation pipeline of 31 developments provides us with excellent visibility on earnings and cash flow.
“We are encouraged by the progress we have made in the build-to-rent sector and we are pleased that the group has already secured an excellent site in London, with solid progress also being made on a number of other specific development projects. Our student accommodation management businesses Fresh Student Living has had an excellent first half and is contributing well to overall group performance. The group has made progress in developing the Five Nine Living business to provide similar letting and operational management services for the build-to-rent sector. Like our student accommodation development business, accommodation management provides us with good future earnings visibility.”
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