Watkin Jones has reported a sharp drop in revenue and pre-tax profit for the half-year to 31 March 2025, amid market volatility and limited transactional liquidity.
However, the firm’s chief executive and chief financial officer told Construction News they were confident of a recovery.
Revenue for the period fell by 26 per cent to £129.2m, down from £175.1m a year before, reflecting a reduced number of in-progress and completed schemes.
The contractor/developer swung to a £900,000 statutory pre-tax loss, compared with a £2.1m profit in the same period last year, the firm said in a London Stock Exchange announcement this morning (29 May).
On an adjusted basis, taking into account a £1.1m cost related to the Building Safety Act, the firm posted a pre-tax profit of £200,000.
In the first half of its 2024 financial year, Watkin Jones posted a £3.4m adjusted pre-tax profit.
“The external market has been pretty volatile,” chief executive Alex Pease said.
He said that trading in the first half “was in line with our expectations… as a result of our focus on operational delivery, cost management and cash generation”.
Pease added: “We are focused on ensuring that the group remains in the best position to exploit opportunities as conditions improve.”
Watkin Jones completed two schemes in the six-month period and signed a pair of development partnerships for schemes in South London and St Helens.
Despite the fall in profit and turnover, Watkin Jones increased its cash balance from £67.1m to £86.8m.
The firm also had £36.2m undrawn from its revolving credit facility with HSBC by 31 March, and said its cash management focus remained “paramount” amid current market conditions.
Watkin Jones said “there remains significant uncertainty” in the construction industry about the extent of cladding remediation required under the Building Safety Act.
It had booked a gross total of £57m by 31 March this year, and had completed remediation on two properties.
Pease said work on “a handful” of other buildings was in progress. “Some of them are subject to Building Safety Regulator approval, but the projects are on time and on budget,” he added.
Watkin Jones stated that it would not declare an interim dividend in order to maintain financial flexibility, although the board would keep the policy under review.
“Our cash is strong and it’s been a real focus for us over the past year or so,” chief financial officer Simon Jones told CN, adding that he envisaged a “sustained recovery in the markets we operate in”.
Pease said: “We continue to actively market and engage with investors on our development opportunities, which are attracting interest, supported by the attractive fundamentals of the PBSA [purpose-built student accommodation] and BTR [build-to-rent] sectors in which we operate.”
The firm’s medium-term outlook remains positive, underpinned by around £270m of forward-sold revenue, including £105m due to be delivered in the second half of the year.
Watkin Jones added that its total secured development pipeline stood at about £1.1bn, and it also reported an “active pipeline” in its refurbishment business.
The firm was ranked 49th in last year’s CN100 index of top contractors.
It posted a pre-tax loss of £300,000 from turnover of £362.4m in its most recent annual results for the year to 30 September 2024.
