Offering the best of both worlds

Watkin Jones is a rare breed. Not only is this developer & manager of large scale, multi occupancy property bucking the wider UK economic trends. But also the company is benefiting from the long term secular tailwinds supporting in its 2 key markets - namely Build to Rent (BtR) & student accommodation (PBSA).

The business is performing well too, with the CEO Richard Simpson saying this morning that “trading remained strong through Q4’19, …[and] the Board expects to report FY19 revenues and earnings in line with expectations, together with a good cash performance”.

Better still, it appears the medium term opportunity is actually much larger than we’d previously thought. With management adding that the company is now targeting an annual run-rate of 3,500 PBSA beds (vs 2,723 FY19), along with 1,000 BtR (0) apartments from FY24 onwards.

Sure, this doesn’t change our near term numbers. Yet further out it provides a material boost to our FY23-24 projections – lifting the valuation to 300p/share vs 250p before. FY19 prelims are scheduled for Tuesday 14th January 2020.