Watkin Jones (WJG) H2 2025 earnings summary

Executive summary

• Delivered robust operational performance in FY 2025, achieving adjusted operating profit at the top end of consensus and maintaining a strong cash and debt position despite economic volatility and reduced market liquidity.

• Strategic focus on control, execution, and diversification, with a vertically integrated platform and market-leading position in attractive real estate segments underpinning future growth.

• Diversification strategies, including Refresh and development partnerships, contributed over £90 million in revenues and are gaining momentum.

• Staff engagement and operational excellence highlighted by strong survey results and successful project completions.

Financial highlights

• Adjusted operating profit reached £6.3 million, at the top end of consensus, with a gross profit margin of 12.4%, up 1.3 percentage points year-over-year.

• Revenue declined 23% year-over-year to £279.8 million due to lower secured forward sold revenue.

• Net cash position of £70.5 million and gross cash of £80.4 million, with cash and available facilities headroom at £130 million.

• Statutory operating loss of £5.8 million after a £5 million provision for building safety remediations and a £7.1 million impairment charge.

• Net assets stand at £125 million, or £0.45 per share excluding goodwill.

Outlook and guidance

• Entered FY 2026 with £340 million of secured revenue, up from £292 million last year.

• Focus remains on delivery of secured pipeline, practical completion of three planned schemes, and continued diversification of revenue streams.

• Targeting a revenue mix of 60% traditional and 40% diversified by FY 2027, with FY 2025 already at a 70/30 split.

• Market conditions remain challenging, with transactions taking longer to close.

• Assumed target gross margins: 14–15% for traditional schemes, 10–12% for Refresh and Development Partnerships.