North Wales developer Watkin Jones bounces back to profit and issues update on cladding work

Developer Watkin Jones has bounced back to profit. The Bangor based firm last year suffered a near £43m loss due to money set aside for cladding remediation work.

But in the first half of the year, revenue rose 14% to £175m. It generated a profit of £2.1m.

They forecast its full year Adjusted Operating Profit will be at least £15 million. The firm’s total secured pipeline of projects now stood at £1.4bn with planning now submitted for 3,000 student bedrooms across four schemes.

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They said that as of 31 March 2024, the Group had a robust liquidity position, with cash and available headroom in its banking facilities totalling £103.7 million made up of cash balances of £67.1 million, RCF Headroom of £26.6 million and n overdraft facility of £10 million.

On remediation work, they said: "We continue to focus on the delivery of our building safety rectification obligations and have completed works on three buildings in the period with cash spend in line with expectations. As previously reported, there remains significant uncertainty in this area across the sector and, as for many other participants in our industry, assets in scope and the scope and cost of works continue to evolve. Based on developments in the period to date, our provision remains unchanged and we will continue to monitor this as discussions with building owners and building investigations continue. We have utilised £10.0 million from our Building Safety provision in HY24, with the discount on the provision also being unwound by £1.3million, resulting in a gross provision at 31 March 2024 of £55.7 million offset by reimbursement assets of £9.7million."

Alex Pease, Chief Executive Officer of Watkin Jones, said: “First half trading was in line with our expectations, with a focus on execution and operational performance. Alongside progress on our schemes in build, we have continued to develop the Group’s longer term pipeline, with new land secured and further planning applications submitted. There has been gradual improvement in sentiment in the property investment market, which we expect to support a continued recovery in forward fund transaction demand, as evidenced in the forward sale of our PBSA scheme in Bristol in March.

“With our established and specialist end-to-end development platform and a sector leading reputation in the BTR and PBSA markets in the UK, our focus remains on positioning the business to best capitalise on a market recovery.”

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