While Watkin Jones declared a strong financial position with a £1.1 billion pipeline of schemes, a ‘challenging market backdrop’ resulted in a decrease in profits for the residential developer, in its half year results.
Revenue for the half year ended 31 March 2025 was £129.2 million, down 26.2 per cent from £175.1 million in HY24.
The firm said operationally the group’s businesses had continued to perform, with developments progressing in line with expectations.
It added the decrease in revenues reflected the continued decreased transaction activity as well as the contribution from the forward sale of its Gas Lane PBSA scheme in Bristol.
Loss before tax for the period was £900,000 (HY24: £2.1 million). An adjusted pre-tax profit of £200,000, decreased 94.1 per cent from 2024 which saw a profit of £3.4 million. This excludes costs of £1.1 million relating to its Building Safety provision use following remedial works at two properties.
A £45.1 million provision has been included to reflect further buildings being identified as requiring remediation, of which £5.4 million is expected to be incurred in the next 12 months, with recovery costs being explored through the group’s insurance providers and supply chain.
Watkin Jones secured an operating profit of £400,000, staying just the right side of the balance sheet despite a 90 per cent sharp fall from £4 million, noted to reflect the decrease in revenues.
Underpinned by attractive PBSA and BTR markets, its investment market was said to remain robust in the medium-term, with available funds set to increase as confidence in the UK economy improves.
This is despite revenues decreasing, by 9.5 per cent in BTR to £90.3 million (HY24: £99.8 million), with PBSA down 58 per cent at £25.6 million (HY24: £61 million).
However, Refresh, its asset refurbishment division, launched in the prior year, demonstrated strong growth of £4.3 million in revenue (HY24: £500,000).
It highlighted £270 million of secure forward sold contracts, of which £105 million is for delivery in the second half of the year, and a total secured pipeline of £1.1 billion, for its positive outlook in line with current market expectations.
New development partnerships signed for schemes include Southwark in London and St Helens, Merseyside.
Alex Pease, chief executive officer at Watkin Jones, said its focus on delivery, controlling costs and broadening its revenue had provided direction which would continue in the second half year.
“Whilst transactional activity remains slow and subject to a continuing volatile market backdrop, we are focussed on ensuring that the group remains in the best position to exploit opportunities as conditions improve.”
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