Watkin Jones has issued a revised trading update for the year ended 30 September 2023 amid “challenging” market conditions.
In July, the Group said if it did not complete any new forward sales in FY2023 it would not expect to improve on the underlying £2 million Profit Before Interest and Taxes (PBIT) recorded in the first half of the business year.
It also said it was reviewing its existing assets as certain values on its balance sheet could cost the firm £10 million.
“We continue to explore the sale of a limited number of non-core assets on our balance sheet and consider it prudent to reassess the carrying value of certain assets with the expectation that this will result in an impairment charge of £10 million,” the Group said at the time.
Since then, Watkin Jones has incurred additional costs, which it said it does not expect to carry forward, and has issued a forecasted revenue for FY2023 of more than £400 million and the underlying PBIT to be at approximately breakeven.
Its gross and net cash position has also been revised up from £68 million and £36 million respectively, to £72 million and £43 million respectively, as at 30 September 2023.
Watkin Jones also said it aims to increase its exceptional provision for remedial works for legacy properties by an additional £30 million to £35 million, reflecting its “intention to sign” the Government’s Responsible Actors Scheme.
The Group’s level of secured revenue for FY2024 is £330 million.
Full results for FY2023 are expected in January 2024.
“The Group was successful in achieving its operational objectives for the second half of the year with practical completion on four schemes in the final quarter and the sale of its three non-core PRS operational assets,” said Watkin Jones.
“In the period since the July trading update we have had significant focus on operational and cost efficiencies within the business.
“This has included reviewing the overhead cost base and implementing a number of cost actions which will generate annualised savings of over £2 million in FY24.”
Adding: “The Group is making progress with its assets for forward sale in the market and remains active, but highly selective in the land market.”
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