Watkin Jones plc
Watkin Jones, a tier 1 developer/manager of purpose built student accommodation (PBSA) and build to rent (BTR) properties, this morning announced it had finished 10 PBSA (10 LY) developments covering 3,415 beds (3,314 LY) during FY18. Delivering record results which were “slightly ahead of expectations†(New ED Adj PBT £48m vs £46m before, & up +15% on LY £41.8m).First & foremost the fundamentals remains “strongâ€. This is characterised by strong occupier demand for quality, yet affordable, University & rented accommodation – all forward funded from a host of premier development partners.
With regards to the numbers, we make no change to our FY19 forecasts, but nudge up the valuation to 235p/share thanks to the stronger than expected progress. At 200p, the stock trades on FY19 PE & EV/EBIT multiples of 12.4x and 8.7x, along with offering a 4.0% dividend yield. In our view, a deserved premium to peers in light of its superior cash generation, asset efficiency, sales visibility and risk profile.
Inland Homes is engaged in land regeneration business, focusing on developing sites in the south and south east of England. The principal activity of Co. is to acquire residential and mixed use sites and planning consent for development. Co. develops a number of the plots for private sale and sells consented plots to housebuilders.
Springfield Properties is engaged in developing a mix of private and affordable housing in Scotland. Co. operates through two divisions: Private Housing and Affordable. The Private Housing division develops smaller to medium sized developments in Scotland, as well as a small number of larger sites. The Affordable division's operations focus on the development of land into stand-alone sites which consist entirely of affordable homes.
Telford Homes is a developer of residential-led, mixed use sites in London. Co.'s customers include individual investors from the U.K. and overseas, owner-occupiers and housing associations. Co. is working with institutional investors in the build to rent sector. Co. has only one reportable segment being housebuilding in the U.K.
Watkin Jones is a holding company. Through its subsidiaries, Co. is engaged in the property development and the management of properties for multiple residential occupation. Co. operates in the following segments: student accommodation, which is engaged in the development of purpose built student accommodation; build to rent, which is engaged in the development of build to rent accommodation; residential, which is engaged in the development of residential property; and accommodation management, which is engaged in the management of student accommodation and build to rent property.
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