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.
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.
Financial Summary
Year end: September (£m unless shown)
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Revenue | 244.2 | 267.0 | 301.9 | 363.1 | 374.8 |
| Adj EBITDA | 36.1 | 38.6 | 43.8 | 50.9 | 64.8 |
| Fully Adj PBT | 36.1 | 40.2 | 43.3 | 50.1 | 50.2 |
| Fully Adj EPS (p) | 0.0 | 23.7 | 14.0 | 16.0 | 16.0 |
Profit & Loss
Year end: September (£m unless shown)
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Revenue | 244.2 | 267.0 | 301.9 | 363.1 | 374.8 |
| Adj EBITDA | 36.1 | 38.6 | 43.8 | 50.9 | 64.8 |
| Adj EBIT | 32.5 | 37.9 | 42.7 | 49.6 | 54.9 |
| Reported PBT | 32.9 | 13.3 | 43.3 | 54.3 | 47.7 |
| Fully Adj PBT | 36.1 | 40.2 | 43.3 | 50.1 | 50.2 |
| NOPAT | 29.8 | 32.0 | 35.8 | 40.7 | 40.9 |
| Reported EPS (p) | 0.0 | 3.1 | 14.0 | 17.3 | 15.1 |
| Fully Adj EPS (p) | 0.0 | 23.7 | 14.0 | 16.0 | 16.0 |
| Dividend per share (p) | 0.0 | 4.0 | 6.6 | 7.6 | 8.4 |
Cash Flow & Balance Sheet
Year end: September (£m unless shown)
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Operating cash flow | 32.0 | 24.5 | 25.4 | 66.6 | 38.9 |
| Free Cash flow | 28.5 | 17.7 | 19.0 | 54.1 | 23.8 |
| FCF per share (p) | #DIV/0! | 13.2 | 7.4 | 21.2 | 9.3 |
| Acquisitions | 1.0 | (11.3) | 5.6 | 3.0 | 0.2 |
| Net cash flow | 33.3 | (12.0) | 18.1 | 41.3 | 9.0 |
| Overdrafts / borrowings | 20.2 | 15.0 | 24.3 | 26.5 | 187.8 |
| Cash & equivalents | 59.3 | 47.2 | 65.3 | 106.6 | 115.7 |
| Net (Debt)/Cash | 39.1 | 32.2 | 41.0 | 80.2 | 76.9 |
| IFRS 16 Lease liabilities | (149.1) | ||||
| Net (Debt)/Cash post IFRS 16 | (72.2) |
Nav & Returns
Year end: September (£m unless shown)
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Net asset value | 113.1 | 102.7 | 126.2 | 153.0 | 161.7 |
| NAV/share (p) | 40.2 | 49.4 | 59.9 | 63.3 | |
| Net Tangible Asset Value | 113.1 | 87.2 | 111.3 | 138.6 | 147.8 |
| NTAV/share (p) | 34.2 | 43.6 | 54.3 | 57.9 | |
| Average equity | 101.9 | 107.9 | 114.5 | 139.6 | 157.3 |
| Post-tax ROE (%) | 21.8% | 3.9% | 31.3% | 31.7% | 24.5% |
Metrics
Year end: September (£m unless shown)
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Revenue growth | 9.3% | 13.1% | 20.3% | 3.2% | |
| Adj EBITDA growth | 6.7% | 13.5% | 16.3% | 27.2% | |
| Adj EBIT growth | 16.7% | 12.7% | 16.2% | 10.6% | |
| Adj PBT growth | 11.2% | 7.8% | 15.7% | 0.4% | |
| Adj EPS growth | #DIV/0! | (40.9%) | 13.7% | 0.2% | |
| Dividend growth | N/A | 65.0% | 15.2% | 9.9% | |
| Adj EBIT margins | 14.2% | 14.1% | 13.7% | 14.6% |