Watkin Jones (WJG) H2 2024 earnings summary

Executive summary

• Delivered a strong and resilient operational performance in FY24, with adjusted operating profit of £10.6 million and strengthened cash position.

• Focused on cash management, liquidity, cost control, and diversification of revenue streams through initiatives like Refresh and development partnerships.

• Enhanced resilience by renewing a £50 million HSBC facility for two years and maintaining a robust cash position.

• Completed 6 schemes, executed 2 sales, and demonstrated agility in structuring profitable transactions despite market liquidity challenges.

• Maintained strong market share in PBSA development despite challenging market conditions.

Financial highlights

• Adjusted operating profit increased to £10.6 million, up from £0.2 million in FY23, reflecting strong cost control and operational execution.

• Core trading gross profit up 12% year-over-year to just over £40 million, with gross margin at 11.1%.

• Trading cash flow improved to a £55 million inflow from a £31.5 million outflow last year.

• Net cash position improved to £83.4 million, with gross cash at £97 million and debt more than halved.

• Net assets increased to £132.6 million (£0.47 per share), and basic EPS turned positive at 3.5p.

Outlook and guidance

• Market conditions remain challenging, but signs of improvement are emerging, with investor interest and a growing pipeline.

• Focus on cost control, cash flow management, and maximizing performance on inbuilt schemes.

• Medium-term aspiration to grow Refresh and development partnerships from 20% to 40% of revenue mix, with traditional transactions reducing from 80% to 60% by FY27.

• Margins expected to remain in line with previous guidance as pipeline is fulfilled.

• Further updates on pipeline evolution expected at half year.