Market's view on Watkin Jones
Published on April 2024
- Watkin Jones reported completion of building safety rectification on three buildings, with cash spend meeting expectations, despite ongoing industry-wide uncertainties regarding asset scopes and costs. Their financial position remains stable with unchanged provisions.
- Watkin Jones experienced a notable loss of GBP 43 million, signaling a rough financial period against an uncertain economic backdrop.
- Observations were made on the seasonal pattern in Watkin Jones’ share prices, typically seeing declines mid to late summer coinciding with project completions and partial recoveries by January.
- Concerns were raised about the company’s selection of development locations, particularly the appropriateness of places without nearby educational facilities, hinting at potential strategic missteps in planning.
- A decline in university enrollments was noted, potentially impacting the demand for student accommodation, a significant part of Watkin Jones’ business model. This was linked to broader shifts in student preferences and international economic strains.
- Speculation about potential benefits from anticipated rate cuts in the UK, which might make it more appealing for international students, potentially benefiting Watkin Jones.
- There were discussions about directors selling shares, although specific details or confirmations of such transactions were not disclosed.
- Mention of an impressive and fast-paced development in Bath raised questions about the company’s cash flow status.
- Insider dealing suspicions were briefly mentioned without specific details.
- Personal investment actions were shared, such as increased holdings in Watkin Jones by a stock watcher’s wife’s broker, suggesting varied investor confidence in the company’s stock.
- The company’s share price target was raised by Jefferies, indicating a cautiously optimistic outlook on its financial health.