Company reports an increase in revenues
WATKIN Jones’ annual results showed an increase in revenue, which the Bangor-based firm put down to its student accommodation development and benefiting from strong growth in build to rent.
The developer saw an increase in revenue to £374.8m from £363.1m in 2018, and it also saw a 6% increase in gross profit.
There was a 9.9% increase in dividend to 8.35p per share.
The annual report also shows the company has a total forward sold and secured development pipeline of 6,670 student beds across 17 sites, for delivery between 2020 and 2024. Sites in the future pipeline include Birmingham, Exeter, Edinburgh and Bath. In the BtR (build to rent) market Watkin Jones announced forward sales of nine sites (approximately 2,300 apartments) for delivery between 2020 and 2023, which include Reading and Wembley.
The construction company’s pretax profit slipped 8.5% to £49.7m from £54.3m. This was partly put down to a exceptional charge of £2.6 million.
This charge relates to the commitment to compensate the group’s new CEO, Richard Simpson, for forfeiting outstanding incentives held in respect of his former employer, of which £2.2 million is a non-cash charge.
In the previous year the company had an exceptional gain of £4.3 million. This gain related to compensation for the reduction in scope of services and early termination of management contracts for assets sold by the Curlew Student Trust and the Group’s share of profit from the sale of the assets paid on its carried interest investment in the Trust.
Mr Simpson said: “We are pleased to report another year of growth for Watkin Jones, which demonstrates the strength and resilience of our capital light business model.
“Despite the difficult macro environment caused by Brexit-related uncertainty, the Group has delivered further profitable growth, in line with expectations.
“Importantly, for the first time, build to rent development made a significant contribution to the Group’s results and we expect it to become an increasingly important growth driver for the Group in the coming years. Watkin Jones is now firmly positioned as the UK’s leading developer and manager of residential for rent schemes.”