Watkin Jones has announced that a “slower than expected” summer has led to its decision to lower its profit expectations for the year.
In its latest trading update, the developer said that it is now expecting an adjusted operating profit of between £10million and £12million, down from its previous forecast of £15million to £20million. Watkin Jones said that it also expects the figure to remain similar for 2025.
The trading update said that summer activity had been slower than anticipated, which it attributed to uncertainty around interest rate cuts. The developer also believes it is unlikely that it will close any further transactions before the financial year ends on 30 September, which will have a knock-on impact on next year’s results and that market conditions will need to “improve at a fast pace” for the outlook to change.
A spokesperson for Watkin Jones, said: “While we have a number of further schemes that we expect to take to market in FY25, given the slower pace of activity currently, we believe that a more prudent set of transaction assumptions should be applied to the next 12 months than previously assumed. As such, we do not currently expect adjusted operating profit in FY25 to be above FY24.”
There were some positives in the trading update, however, with the developer expecting its gross cash to reach £80million by the end of the year, an increase of £13million on the previous year, while its net cash is expected to rise to £65million from £44million.
The update said: “While the group’s robust net cash position provides it with a strong financial underpin for its committed spending requirements, it is nevertheless a limiting factor on the extent to which we can take advantage of market conditions and further develop our pipeline.”
“In light of this, the board is undertaking a review of a range of options that may be available to enhance its medium and longer-term funding position, thereby allowing the group to capitalise on a market recovery.”
