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Watkin Jones profit up strongly in first half
Multi-occupancy property asset developer Watkin Jones issued its half year results for the six months ended 31 March on Tuesday, reporting a "successful" first six months of the financial year, with trading in line with its expectations.
The AIM-traded firm said revenues for the half year were up 18.4% year-on-year, driven by student accommodation developments.
It claimed "strong" profit growth for the period, with gross profit increased by 18.6% to £34.5m, and operating profit rising 22.7% to £23.8m.
Watkin Jones' gross margin for the six months was maintained at 21.8%.
It confirmed a 12.3% increase in the interim dividend to 2.47p, in line with the board's progressive dividend policy.
The directors also highlighted "strong" cash performance in the first half of the year, with net cash at 31 March of £38.4m.
"We are delighted to report strong growth in revenue and profits in the first six months of the financial year," said CEO Mark Watkin Jones.
"Results were in line with our expectations, reflecting good build progress on forward sold student accommodation developments."
Watkin Jones said the company was continuing to see strong demand for its student accommodation developments, and was pleased that demand from institutional investors - keen to acquire scale in the maturing asset class - remained robust.
"We have an excellent development pipeline and we are excited about several other opportunities expected to be added to the pipeline in the second half of the year.
"We are also highly encouraged by the recent development funding agreement with M&G which highlights our continued progress in the build to rent sector.
"The M&G agreement represents an important addition to Watkin Jones' build to rent strategy, alongside the group's growing owned site pipeline."
The group was now in control of five build to rent development sites, and remained in positive negotiations on several other opportunities, Mark Watkin Jones said.
He added that the board remained "optimistic" about the scale of opportunities that sector offered.
"The fundamentals for each of our business segments remain positive and the market dynamics strongly support the group's forward sale model, providing us with good future visibility on earnings and cash flows.
"On behalf of the board I would like to thank all our staff for helping us deliver an excellent first half year performance.
"The board is confident in the outlook for the group."