Watkin Jones has reported a fall in revenue and gross profit in its half-year results for the six months ended 31 March 2025.
The developer and operators’ revenue declined to £129.2m compared to £175.1m at the same time last year due to fewer scheme completions and a muted transactional market.
The group also reported a fall in profitability posting an adjusted pre-tax profit of £0.2m down from £3.4m last year and operating profit of £0.4m a fall from £4m last year.
Statutory results reflected the impact of a £1.1m exceptional finance cost related to the unwinding of the Building Safety provision, leading to a statutory pre-tax loss of £0.9m.
The group’s gross profit stood at £14.4m, compared to £18.4m in the prior year. Margins were held in line with guidance, supported by strong construction delivery across its in-build schemes, two of which reached completion during the period.
Despite market constraints, Watkin Jones demonstrated robust cash discipline, ending the period with £73.4m in adjusted net cash, significantly higher than the £44m reported in HY24. Gross cash balances also improved to £86.8m from last year’s £67.1m.
The company said several schemes are currently being marketed, including a £260m purpose built student accommodation scheme comprising 762-beds in London’s Nine Elms.
The group has a number of further forward sales targeted for close in the second half, and is also under offer to acquire four schemes, which would enable a “full-year performance in line with current market expectations”.
Alex Pease, chief executive officer, said: “I am pleased to report that trading in the first half was in line with our expectations, despite the continuing challenging market backdrop, as a result of our focus on operational delivery, cost management and cash generation.”
He added the group’s continued ability to secure new development partnerships — including recent agreements in Southwark and St Helens — underscores the company’s adaptability and strong market positioning within the purpose built student accommodation and build to rent sectors.
Watkin Jones has submitted planning applications for a further 722 beds across two PBSA and co-living schemes and secured one development site (subject to planning), reflecting its selective approach to building a future pipeline.
Meanwhile, the group’s secured development pipeline totals around £1.1bn, with £270m of forward-sold revenue, £105m of which is expected to be delivered in H2 2025.
However, reflecting the ongoing uncertainty in the wider real estate investment market, the board has opted not to declare an interim dividend, instead prioritising financial flexibility.
Looking ahead, the group remains focused on cost control, delivering in-build projects, and expanding revenue streams, with further forward sales expected in the second half of the year to support full-year performance.
Pease added: “We continue to actively market and engage with investors on our development opportunities… While transactional activity remains slow, we are focused on ensuring that the Group remains in the best position to exploit opportunities as conditions improve.”
Watkin Jones’ medium-term outlook remains underpinned by strong sector fundamentals, with institutional appetite for PBSA and BTR assets expected to strengthen as UK economic sentiment recovers.
Image: Alex Pease
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