Watkin Jones sees first half profits up 24%

Student accommodation company Watkin Jones has announced a near 24% uplift in first half profits, driven by new developments.

In its half year report, issued last Thursday (June 1), the developer said gross profits had risen 23.8% in the six months to March 2017 to £29.1m, compared to £23.5m in the same period in 2015-16.

Revenues thoough were down 8.4% at £133.7m from £145.9m, which Watkins Jones said had been anticipated due to the timing of forward development sales. However pre-tax profits were £21.1m, versus a first half loss last year of £9.9m, which were affected by costs relating to the firm’s admission to AIM.

In addition, there was £11.7m-worth of non-repeating inventory sales of completed residential apartments in the first half 2016.

The firm said it expected revenues to pick up the second half of the financial year.

Watkin Jones has a developmental pipeline of over 11,200 beds across 31 sites, with 10 sold and set to be completed this year.

In its build-to-rent operation, the firm has targeted six sites across the UK for completion between 2019 and 2021, but it said only three are currently secured and going through planning.

Commenting on the results, Mark Watkin Jones, the group’s chief executive, said the firm had seen good profit growth in the first half, driven by its core student accommodation developments.

“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,” he added.