Watkin Jones (WJG) H2 2025 earnings summary

Executive summary

• Delivered resilient operational performance in FY25 with adjusted operating profit of £6.3m at the top end of consensus, despite a 23% revenue drop due to fewer forward sales and economic volatility.

• Gross profit margin improved to 12.4%, supported by delivery efficiency and cost control.

• Maintained strong cash and debt management, ending with gross cash of £80.4m and net cash of £70.5m.

• Diversification and innovation in revenue streams, including Refresh and development partnerships, contributed over £90m in revenues and now represent 30% of the mix.

• Four schemes completed on or ahead of schedule, with staff engagement and operational delivery outperforming targets.

Financial highlights

• Revenue declined to £279.8m from £362.4m year-over-year, reflecting lower secured forward sold revenue.

• Adjusted operating profit of £6.3m and adjusted profit before tax of £5.6m.

• Gross profit margin increased by 1.3 percentage points to 12.4% year-over-year.

• Overheads reduced by 4% despite inflationary pressures.

• Statutory operating loss of £5.8m after £5m building safety provision and £7.1m impairment charge.

Outlook and guidance

• Entered FY26 with £340m of secured revenue, up from £290m last year.

• Focus remains on delivery of secured pipeline and practical completion of three schemes due this year.

• Diversified revenue now 30% of mix, targeting 40% by FY27.

• Pipeline grown to over £2bn, with over 70% contractually secured and nearly half with planning consent.

• Market remains challenging, with transactions taking longer to close.