Full house of property deals
Quality businesses have many attractions. Not least the ability to expand profitably, even during choppy seas such as today. Enter Watkin Jones, a leading UK developer & manager of large scale, multi occupancy accommodation, focusing on purpose built student accommodation (PBSA) and residential build to rent (BtR).Yesterday the company announced a slew of property deals and pipeline updates, involving 2,532 PBSA beds, 431 BtR units and 88 residential appts. Here UK demand for new build rental properties remains robust, reflecting a chronic under supply, high employment, increasing real wages and elevated house prices.
What’s more, institutional capital continues to flood into these two sectors, thanks to the sustainable, inflation beating returns - particularly when compared to the >$15 trillion of negative yielding sovereign / investment grade debt.
At 221p, the stock trades at a modest 13.8x PER (or 11.9x ex cash), whilst paying a healthy 3.6% dividend yield. Elsewhere, the firm remains on track to hit our adjusted FY19 PBT and EPS estimates of £51.0m and 16p respectively on revenues of £390m, closing Sept’19 with net cash of £90.4m (worth 35.4p/share). Likewise we make no change to the 250p/share SOTP valuation.
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.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.