In a trading update ahead of its final results for the year ended 30th September 2018, to be announced in January, the Watkin Jones board said that revenues and underlying earnings for the financial year would be “slightly ahead of its previous expectations”.
During the year, Watkin Jones – AIM listed since March 2016 – completed 10 student accommodation developments across the UK with a total of 3,415 beds. As previously announced, at the end of FY18 the Group successfully completed an agreement for the forward sale of a portfolio of four student accommodation developments comprising 1,815 beds for delivery in FY19 and FY20, together with an option for the forward sale of a fifth student accommodation development of 348 beds for delivery in FY21.
The business also reports continued progress with its strategy for the Build to Rent sector, forging development agreements with M&G Real Estate to deliver a scheme of 315 apartments in Reading and with Singaporean developers to deliver a scheme of 300 apartments in Wembley, both of which are for completion in FY21. Including these two developments, Watkin Jones now has a secured delivery pipeline of approximately 1,500 apartments across seven sites for delivery before September 2022. It also has other site opportunities in negotiations to acquire or under offer.
The Watkin Jones residential division had a good year and completed 175 sales (FY17: 94 sales), comprising a mix of homes and apartment sales across the division's North West residential sites.
Chief executive Mark Watkin Jones said: "Trading in the period has been strong and we are pleased to report that revenues and underlying earnings for the financial year are expected to be slightly ahead of the board's previous expectations. We have achieved excellent progress on forward sold student accommodation developments, successfully completing all ten schemes scheduled for delivery in the period and continue to see strong demand from institutional investors. We are also encouraged by the progress that has been made in the Build to Rent sector, with the agreements for significant developments in Reading and Wembley demonstrating our position as a developer of choice for leading institutions.
“The group has a strong development pipeline that provides us with excellent future earnings and cash flow visibility, demonstrating the robustness of our model and ability to deliver significant returns for our shareholders."