Student housing specialist says collapse of main contractor on job hit it for nearly 拢3.5m
黑洞社区 safety remedial work and restructuring costs sent student housing and BTR specialist Watkin Jones sinking into the red last year.
The firm racked up a pre-tax loss 拢42.5m in the 12 months to September, compared to an 拢18.4m profit last time. Turnover edged up 1.5% to 拢413m.
It said underlying figures, without 拢35m of remedial costs and a 拢3m restructuring charge, would have seen it post a pre-tax loss of around 拢3m with operating profit breaking even.
The firm鈥檚 numbers were also hit by the collapse of a contractor on a student accommodation scheme in Exter which added an extra 拢3.4m to the construction cost while it was forced to fork out higher labour costs to complete schemes in Scotland and the South-west.
Watkin Jones also took an impairment charge of 拢5.5m on the disposal of its non-core land bank and pipeline assets while it made a further 15 people redundant last autumn on top of the 40 jobs it cut in the immediate aftermath of the Truss mini-Budget in September 2022.
New chief executive Alex Pease admitted it had been a 鈥渢ough year鈥� but added: 鈥淎 huge amount of work has been done to get to a break-even operating profit.鈥�
He said the business would focus on development partnerships and a strand of work it calls 鈥榬efresh鈥�, which comprises refurbishment of PBSA and private rental properties for ESG and building safety purposes.
He added: 鈥淲e are seeing more opportunities with land consent at the moment and if the consents are there we have great partnership credentials with institutional capital [鈥 so instead of us buying it we can partner with investors, they buy the assets we are planning, we enter a development agreement with them and deliver the building for them.鈥�
At the year end, its development pipeline comprised 4,400 BTR apartments and 6,500 PBSA beds 鈥� worth a total of around 拢2bn.
The firm said it expected to return to the black this year with a profit of between 拢15m and 拢20m.
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