Contractor collapse causes losses at Watkin Jones
Watkin Jones suffered a loss in the six months to March 31 2023 as its balance sheet was hit by the collapse of the main contractor on a scheme in Exeter and the cost of making 10% of staff redundant.
Half year results for the build-to-rent specialist show a pre-tax loss of £800,000 compared to £16.6m last time as turnover dropped to £153.9m from £193m.
But Watkins Jones is confident of a second half recovery as it confirmed the forward sale of a 819 bed scheme in Bristol with a further five deals in the pipeline.
Richard Simpson, Chief Executive Officer of Watkin Jones, said: “We are pleased to have delivered a half year result in line with expectations, managing build costs and our supply chain well. We are also encouraged by the early signs of build inflation reducing which should lead to future buying gains.
“We look to the second half of the year with confidence and are particularly pleased to have secured the forward sale transaction in Bristol and expect to complete further forward sales before the year end.
“The overall recovery in the forward fund market is encouraging, however the Group will maintain a cautious approach to managing the pipeline. In addition to growing confidence in the sector, we are seeing attractive land acquisition opportunities and these coupled with our excellent operational performance leave us confident for the future.”
Watkin Jones said the latest period saw £1.1m in “people restructuring costs” and “additional build costs incurred at our scheme in Exeter where the main contractor went into liquidation.”