Constructor Watkin Jones builds on solid year to post record profits
Accomodation construction firm Watkin Jones’ share price rose this morning after it posted record profits profits and a 24-site pipeline of projects over the next three years.
In its full-year results, the AIM listed company said director of the board Mark Watkin Jones was stepping down today, having been replaced as chief executive on 2 January.
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The figures
The company reported pre-tax profits of £54.3m for the year ending 30 September, 25.3 per cent up year-on-year against last year’s £43.3m, while revenue rose 20.3 per cent from £301.9m to £363.1m.
Cash flow was £106.6m at the end of the year, compared to £65.3m in 2017, while reported liabilities were £26.4m up nine per cent on £24.2m the previous year.
Why it’s important
The company’s new chief executive, Richard Simpson, started the role on 2 January, having replaced Mark Watkin Jones, which has seen shares rise gradually since the start of the year.
Watkin Jones also appears to have defied reports earlier this month that growth in the UK construction sector eased to its slowest rate in three months in December.
What Watkin Jones said:
Simpson said: “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.
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"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.
"On a personal note, having only recently joined the group, I am very much looking forward to working closely with my new colleagues, stakeholders and shareholders to continue to deliver the excellent performance for which Watkin Jones is known.”
What analysts said:
In a research note, analysts at Breneberg said the company's pipeline of developments "continues to deliver strong revenue."
The better-than-expected results were "driven mainly by the forward sale of four student accommodation developments on the last day of the financial year," they said.
"We continue to believe the student accommodation market presents attractive growth dynamics, which Watkin Jones remains well placed to capitalise on."