Mar ark W Wat atkin Jon ones es – CEO Philip ilip B Byrom – CFO FO WATKIN JONE N JONES PL PLC HALF Y HA YEAR RE R RESU SULTS To 31 1 Ma March 20 2018 8 22 nd May 2018
FINANCIAL IAL H HIGHLIG IGHTS Bagot ot S Street reet, Birm rmingh gham 492 Beds | Due to complete August 2018 2
FINAN ANCIAL AL H HIGHLIGHTS • Revenue up by 18.4% to £158.3M (H1 FY17 £133.7M) driven by student accommodation developments. • Gross margin maintained at 21.8% (H1 FY17 21.8%). • Operating profit up by 22.7% to £23.8M (H1 FY17 £19.4M). • EBITDA up by 11.9% to £24.5M (H1 FY17 £21.9M). RES ESULTS S SUMMARY • Profit before tax up by 11.9% to £23.6M (H1 FY17 £21.1M). • Basic EPS up by 12.5% to 7.53 pence per share (H1 FY17 6.69 pence per share). • Net cash up by 328% at 31 st March 2018 to £38.4M (H1 FY17 £11.7M). • Interim dividend up by 12.3% to 2.47 pence per share (H1 FY17 2.2 pence per share) in line with our progressive dividend policy. 3
BUSI USINESS H S HIGHLIGHTS MAINTAINING V VISI SIBILITY 4 Bridge Street, Cardiff 477 Beds | Due to complete August 2018
BUSINE INESS H HIGHLIG LIGHTS – MAINT INTAIN INING V ING VISIBILIT ILITY • Total development pipeline of over 10,300 beds across 25 developments. STUDENT ENT • 15 developments (6,090 beds) pre-sold to Investors. ACCOMMO MMODATION DEVEL ELOPMENT ENT • 8,752 beds with planning consent. PIPELINE • 21 developments with planning consent. • Development Agreement entered into to deliver 315 apartments for M&G at Reading. BUILD T TO RENT RENT • Planning consents secured for 312 apartments in the period. DEVEL ELOPMENT ENT PIPELINE • The Group expects to deliver over 1,500 build to rent apartments in the next five years. • Improved Gross Margin to 65.3% (H1 FY17 63.2%). ACC CCOMMODATION • 16,185 student beds under management at 31 st March 2018. MANAGE GEMENT • 532 build to rent units under management at 31 st March 2018. • Richard Simpson, former Group Property Director of Unite plc, appointed as CEO to succeed Mark SUCCESSION Watkin Jones. 5
AMBIT ITIO ION & N & STRATEG EGY St Mungo’s, s, G Glasg sgow w 349 Beds | Due for completion August 2018 6
AM AMBI BITION & ON & STRATEGY • Leverage PBSA expertise to become • Continue sustainable growth of a leader in this sector. earnings in the core student • Enhance growth and visibility, whilst property development business. retaining funding model. • Exploit opportunities to enhance • Maintain a strong forward sold supply chain efficiency through position to limit risk. scheduling. • Look to accelerate overall opportunity • Maintain our position as the where possible. partner of choice for our existing • Deliver 1,500 apartments in next 5 clients and add new clients. years. • Continue to grow margin. • Continue growth of Fresh Student Living to increase recurring • Continue to release cash from management fee income. inventory. • Growth of Five Nine Living to add • Develop out land bank. to recurring management fee income. • Acquire strategic sites. 7
DEV EVELOPMENT PI PIPELI PELINE STUDENT A T ACCOMM MMOD ODATIO ION Midland Road, Bath 94 Student Beds & 14 Keyworker Studios | Due for completion August 2018 8
CURRENT PIPELINE OF STUDENT PROJECTS UNDERPINS VISIBILITY PIPELINE PROVIDES EARNINGS VISIBILITY STUDENT ACCOMMODATION PIPELINE SUMMARY Ove ver 1 r 10,0 ,000 b beds secured and scheduled to be delivered in the • next four years across 25 sc scheme mes s and a further 2 sc scheme mes wi s with over 1, 1,00 000 b 0 beds in legals to acquire. 7 d deve velop lopments being marketed for sale. • FY18 18 – Ten d deve velop lopments ( (3,4 ,415 b beds) f forward s sold • FY19 19 – Four ( r (2,2 ,245 B Beds) of planned 6 developments (2,72 723 B 3 Beds) • forward s sold. d. All have planning consent. FY20 20 – One (430 Be Beds) s) of planned 7 Developments (c.3000 000 B Beds) • forward s sold. d. Five have planning consent. 15 s sche hemes and 6,090 b 90 beds pre sold to investors and under • construction. In In excess of of 5,000 b beds across 15 sites identified as potential • opportunities and being pursued. 4000 3500 Number of Beds Number of Beds - Unsecured 3000 in Legals Sites 2500 Number of Beds - Secured Sites 2000 Number of Beds - Under 1500 Offer/In Legals 1000 Number of Beds - Forward Sold 500 Student accommodation 0 pipeline locations FY18 FY19 FY20 FY21 9
STUDE DENT A ACCO CCOMMODATION MARK RKET T Occupier De Dema mand 10 Bailey Fields, Sheffield 543 Beds | Due for completion July 2018
PURP RPOSE B BUILT STUDENT PROP OPERT RTY MARKE RKET OCCU CCUPIER D DEMAND Occupier D Demand Student numbers continue to rise. • >1.79 million full time higher education students in UK. • 404,000 (22%) students in the UK are from outside of the UK. • Flight to improved quality continues. • Bed ed N Numbers i in the UK e UK 602,000 PBSA beds in the UK (C&W – October 2017) with an • estimated 219,000 PBSA beds in the UK operated by the Private Sector (GVA – Spring 2018). The balance in the UK is operated by the Universities of which it is estimated that 75% was built pre 1999 and is • no longer fit for purpose or meeting occupier expectation. The O Offer Typical layout allows occupancy with chosen flat mates. • All inclusive rents. • Safe/secure with on site management. • Enhanced services – gyms, common rooms, laundry. • 11
STUDE DENT A ACCO CCOMMODATION MARK RKET T Investme ment De Dema mand Kyl yle Street, Gla , Glasgow 401 Beds | Due for completion August 2019 12
PURP URPOSE BUI UILT S T STUD TUDENT PROPERT RTY M Y MARK RKET T INVES IN ESTMENT NT D DEM EMAND ND Purpos ose B Built lt S Student A Accommodat ation on Investment D Deman and PBSA remains a stable income producing asset. • Asset Class is now seen as Mature. • £4.1 billion of stock traded in 2017 (£3.2 billion 2016) with £1.0 billion of stock traded in Q1 2018 and a further • £1.5 billion of stock believed to be under offer. Investment sentiment remains strong and investors willing to pay premiums for larger portfolios driven by need to • allocate investment capital and build scale quickly. Rental Growth continues. • Direct Let Yields: 4.25-4.5% Prime London, 4.75-5% Inner London, 5.25- 5.5% Prime Regional, 6% Secondary • Regional. Our current development partners include AIG, Arlington, Brookfield (BSRE), CBRE Global, Generation Estates, GSA, • L&G, La Salle IM, M&G, UBS, UPP. 13
DEV EVELOPMENT PI PIPELI PELINE BUIL ILD T TO RE RENT NT Bath Lane, Leicester 322 Units | Due for commencement 2019 14
DEVELOPMENT PIPELINE OF BUILD TO RENT OPPORTUNITIES Year of Commencement GROWING MOMENTUM BUILD TO RENT PIPELINE SUMMARY 1,597 97 apa partment nts in the pipeline across • 8 developme pment nts made up of:- 31 315 ap apar artments under a development agreement • with M&G at Reading for a 2021 completion. 5 develop opment sites secured (908 apartments), of • which 3 developments (482 apartments) have planning. 2 develop lopments under negotiation to acquire – • target 437 37 apartm tments ts 800 700 Number of Apartments - Unsecured under 600 negotiation Number of Beds 500 Number of Apartments - Secured Units 400 Number of Apartments - 300 Under Offer / In Legals 200 Number of Apartments - 100 Forward Sold Build to Rent pipeline 0 locations FY18 FY19 FY20 FY21 15
BUIL ILD T TO RE RENT NT OPPORTU RTUNIT ITY The Gateway, Sheffield 78 Apartments | Completed 2017 16
BUILD LD TO RENT – AN EMERGING & & UNDERSU SUPPLI LIED ASSE SET CLA LASS SS – OPPORTU RTUNITY TO A ACCELERA RATE TE GRO ROWTH TH T THROU OUGH ESTABL BLISHING A FUND EMERGING ASSET CLASS THE POTENTIAL FUND VEHICLE We believe that BTR market dynamics will mirror PBSA as • Consideration of a listed vehicle ongoing. • sophistication and understanding build – but this takes time. Opportunity for Investors to gain pure exposure to the • Against this backdrop, we are seeking to maximise WJ PLC’s • emerging market and invest in the BTR sector. BTR opportunity without trading away returns or changing our Assets identified and under control which • forward funded business model. differentiates it from other investment vehicles in the Dedicated source of capital would allow WJ PLC to maintain • market. momentum in its BTR pipeline whilst the wider market Externally managed using WJ plc expertise and • evolves. governed by a separate independent Board. Right of first refusal from Fund over WJ BTR assets. SIGNIFICANT OPPORTUNITY FOR WATKIN JONES PLC • Dedicated investment vehicle could deliver quicker and bigger benefits to WJ PLC’s BTR strategy: Would enable the acceleration of the current BTR pipeline. • Potential for faster turnover of capital. • Generate incremental revenue from investment management • activities. Creates further opportunities for Fresh Property Group. • Offers further upside in the form of dividend and capital • appreciation if WJ PLC takes a minority equity stake. Would not prevent WJ PLC from pursuing Development • Agreement opportunities as part of its wider BTR strategy. 17
BUIL ILD T TO RE RENT NT MARKET KET Sutton Court Road, Sutton 165 Apartments | Due for completion 2020 18
Recommend
More recommend
