Presentation by the management team of Watkin Jones – 15/06/2023

Panelists: Richard Simpson, Chief Executive Officer and Sarah Sergeant, Chief Financial Officer

Watkin Jones (WJG) develops build-to-rent (BTR) and purpose-built student accommodation (PBSA) schemes, largely forward-funded by institutional investors, which acquire sites from WJG with the benefit of planning and then pay for the works monthly as development progresses, thus reducing capital tie-up for WJ. The group also provides an accommodation management service through its Fresh Property Group (FPG) business, which manages both WJG and third-party developed assets, and operates a more traditional housebuilding business focused on the North West. The company, which was founded by carpenter Huw Jones in 1791, evolved as a developer before specialising in student accommodation, and was admitted to AIM in 2016.

Watkin Jones - Interim Results Presentation

Watch the full presentation below or navigate to the segments and questions that interest you the most.

1. What impact will further interest rate increases have on the business and what will be the effects of Gove's proposals?

2. In terms of the yields, what is the differential between what investors are looking for in the BTR and Student side? How have they changed since the mini budget?

3. Are fixed price agreements causing any issues for the supply chain?

4. Can you talk a bit more about the working capital seasonality and cycles throughout the year.

5. You indicated that on newly signed deals, cash payments are getting back-ended. Does that have an impact on your cash flow going forward?

6. The dividend at the HY stage was reduced more than the market was probably expecting, and likely a factor behind the drop in share price at the time. Given where market forecasts are now, it would suggest that the dividend payment at the end of the year is going to be more than the normal 2/3 proportion that you normally pay out at that stage. How dependent is that on you closing various deals through the second half?

7. I notice that the PBSA business suffered a lot more in the first half than the BTR business when comparing revenue performances. Can you explain why?

8. Forecasts for 2023 remain unchanged, which implies nearly £300m of revenue for the second half. This is well above anything achieved historically. Is this realistic?

9. Could you please provide a bit of colour on the rephasing of profit and how that aligns to accounting policies for revenue recognition?

10. In terms of institutional interest, are there any particularly areas where this is stronger?

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