Pre-tax profit for the year was up by more than 25% to £54.3m (FY 2017: £43.3m) on revenue up 20% to £363.1m (FY 2017: £301.9m).
The revenue and profit growth was driven by student accommodation development, which accounted for £312.7m of the total revenue. Watkin Jones completed 10 developments (3,415 beds) in FY18, has nine developments (4,490 beds) currently forward sold for delivery in the next two years, and has a total secured development pipeline of 7,534 student beds across 17 sites, for delivery by the end of September 2021.
The company has also moved into the build-to-rent private residential sector. It has entered into development agreements with investors to deliver apartment schemes in Reading and Wembley, for occupation in 2021 – a 315-apartment scheme for M&G in Reading and a 300-apartment scheme for Singaporean investors Lum Chang Holdings and Sin Heng Chang in Wembley.
Including these, it has a development pipeline of approximately 1,500 apartments across seven sites. The board is exploring the possibility of establishing a new investment vehicle for this market.
Richard Simpson joined the board as chief executive on 2nd January 2019, with founder and former CEO Mark Watkin Jones stepping down from the board on 15th January 2019.
Richard Simpson was recruited from Unite (the student accommodation developer, not the trades union) where he was property director. [See our previous report here.]
The new chief executive said: "Today Watkin Jones has reported a record set of full year results which show that the group has performed strongly across all key financial metrics of the business. We continue to have excellent visibility of our future revenues and earnings, supported by the pipeline of forward sold and secured sites for student accommodation. The locations and forward sale values we have achieved for these schemes underpin our earnings expectations from this division over the next twelve months and beyond.
“Our success in securing the significant build to rent development agreements in Reading and Wembley, together with our secured pipeline of sites, is highly encouraging. In addition, our residential and accommodation management divisions are well positioned to contribute to progressive earnings growth. As a result, we remain confident in the outlook for the group.”