21st Aug 2024 09:28
(Alliance News) - Watkin Jones PLC on Wednesday warned full-year profit would be lower than expected reflecting slower market activity in the summer.
This was "principally due to the continued uncertainty over the pace of interest rate cuts", the London-based student accommodation developer and manager said in a statement.
"As such we believe it is now unlikely that we will close any further transactions before the financial year end," Watkin Jones added.
Watkin Jones said while results for the financial year to September 30 will be lower than previously anticipated, the group is expected to show material improvement in financial 2024, with adjusted operating profit currently expected to be between GBP10 to GBP12 million compared to just GBP0.2 million a year prior.
However, in May, the company forecast adjusted operating profit of at least GBP15 million.
In response, shares in Watkin Jones slumped 29% to 36.36 pence each in London on Tuesday.
Watkin Jones said the lower number of transactions in financial 2024 will have an impact on the results for the following financial year.
This is because the schemes will not contribute to revenue in future periods until they are forward sold, the firm explained.
As a result, the company does not currently expect adjusted operating profit in financial 2025 to be higher than that reached in the current financial year.
In addition, the company said while its "robust" net cash position provides it with a strong financial underpin for its committed spending requirements, it is a limiting factor on the extent to which it can further develop the pipeline.
In light of this, Watkin Jones said it is undertaking a review of options to enhance its medium and longer term funding position.
By Jeremy Cutler, Alliance News reporter
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