Watkin Jones plc
Visit Watkin Jones plc
Description
The UK’s leading developer and manager in the residential rental market, focused on student accommodation and the more emerging build-to-rent (BTR) market. Its development model is largely pre-funded by institutional investors, with many of whom it has strong relationships. It also manages student and BTR properties for institutions and has a profitable housebuilding division.
Company Presentations
Feb
4Progressive Presents the management team of Watkin Jones, the UK’s leading developer and manager of residential for rent
Watkin Jones is the UK's leading developer and manager of residential for rent, with a focus on purpose built student accommodation, (PBSA), and increasingly build to rent, (BTR). Blue-chip Institutional clients pay for the development sites that Watkin Jones identifies upfront, so the group’s cash outlay is minimal. There is also low development risk as the business passes on the construction risk to its subcontractors via fixed price ‘design and build’ contracts.
Presenters:
Richard Simpson, CEO
Phil Byrom, CFO
Our view
The company combines long-term growth opportunities in a low-risk, capital-light model. It is cash-positive, developments are forward-funded and the accommodation management division has a strong element of recurring income. Moreover, we believe the economic fall-out from Covid-19 could present land buying opportunities.
Recent Research
View all research for Watkin Jones plc
Financial Summary
Year end: September (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Revenue | 363.1 | 374.8 | 354.1 | 459.5 | 531.9 |
| Fully Adj PBT | 50.1 | 50.4 | 45.8 | 50.0 | 55.1 |
| Fully Adj EPS (p) | 16.0 | 16.1 | 14.7 | 15.8 | 17.4 |
| Dividend per share (p) | 7.6 | 8.4 | 7.4 | 8.0 | 8.7 |
Profit & Loss
Year end: September (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Revenue | 363.1 | 374.8 | 354.1 | 459.5 | 531.9 |
| Adj EBITDA | 50.9 | 64.8 | 61.1 | 64.0 | 69.7 |
| Adj EBIT | 49.6 | 55.6 | 51.7 | 54.8 | 59.9 |
| Reported PBT | 54.3 | 47.9 | 25.3 | 50.0 | 55.1 |
| Fully Adj PBT | 50.1 | 50.4 | 45.8 | 50.0 | 55.1 |
| NOPAT | 40.7 | 41.1 | 37.6 | 40.5 | 44.7 |
| Reported EPS (p) | 17.3 | 15.2 | 8.2 | 15.8 | 17.4 |
| Fully Adj EPS (p) | 16.0 | 16.1 | 14.7 | 15.8 | 17.4 |
| Dividend per share (p) | 7.6 | 8.4 | 7.4 | 8.0 | 8.7 |
Cash Flow & Balance Sheet
Year end: September (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Operating cash flow | 66.6 | 38.9 | 54.9 | 29.0 | 35.0 |
| Free Cash flow | 54.1 | 23.8 | 38.0 | 14.3 | 19.3 |
| FCF per share (p) | 21.2 | 9.3 | 14.9 | 5.6 | 7.5 |
| Acquisitions | 3.0 | 0.2 | 0.8 | 0.0 | 0.0 |
| Net cash flow | 41.3 | 9.0 | 18.9 | (11.2) | (1.8) |
| Overdrafts / borrowings | 26.5 | 176.3 | 174.1 | 174.1 | 174.1 |
| Cash & equivalents | 106.6 | 115.7 | 134.5 | 123.3 | 121.5 |
| Net (Debt)/Cash, pre-IFRS 16 | 80.2 | 88.4 | 94.8 | 85.2 | 83.3 |
| IFRS 16 Lease liabilities | (149.0) | (134.5) | (136.0) | (136.0) | |
| Net (Debt)/Cash post-IFRS 16 | (60.7) | (39.6) | (50.8) | (52.7) |
Nav & Returns
Year end: September (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Net asset value | 153.0 | 161.1 | 167.9 | 182.8 | 206.3 |
| NAV/share (p) | |||||
| Net Tangible Asset Value | 138.6 | 147.3 | 154.6 | 170.1 | 194.1 |
| NTAV/share (p) | |||||
| Average equity | 114.5 | 139.6 | 157.1 | 164.5 | 175.3 |
| Post-tax ROE (%) | 38.6% | 27.8% | 13.4% | 24.6% | 25.5% |
Metrics
Year end: September (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Revenue growth | 9.3% | 3.2% | (5.5%) | 29.8% | 15.7% |
| Adj EBITDA growth | 6.7% | 27.2% | (5.7%) | 4.7% | 9.0% |
| Adj EBIT growth | 16.7% | 12.1% | (7.1%) | 6.1% | 9.4% |
| Adj PBT growth | 11.2% | 0.8% | (9.3%) | 9.3% | 10.3% |
| Adj EPS growth | NA | 0.7% | (8.5%) | 7.6% | 10.2% |
| Dividend growth | NA | 9.9% | (12.0%) | 8.8% | 8.8% |
| Adj EBIT margins | 13.7% | 14.8% | 14.6% | 11.9% | 11.3% |