Watkin Jones pre-tax profit rises to £15m

Watkin Jones has reported a pre-tax profit of £15m which represents a profit margin of 13.4%.

The group’s latest financial figures, covering the 12 months to 30 September 2008, show turnover ahead at £110m.

The margin in 2007 had run to 11.7%, a similar turnover generating a pre-tax profit of £13m.

The directors said that 2008 was a “very successful year”.

The strong point was the 20% rise in student accommodation activities which offset some of the woes in housing sales. “Sales from the housing division were inevitably hit by the severe downturn in the market,” said the directors.

The group pushed for new land sites, particularly for student accommodation developments. The result was an increase in the landbank to £89m, representing a rise of £17m.

Work-in-progress increased in the year by £34m, to a new high figure of £60m.

Land and work-in-progress is stated in the accounts at the lower of cost and net realisable value.

A new borrowing facility was agreed with Royal Bank of Scotland and as a result, Watkin can push the boat out further – spending up to £160m – to snap up more land and continue to grow.

The closing cash balance was £8m.

This was £9m less than expected and debtors at £35m were “significantly higher” due to a delay in receipt of payment following the completion of the student accommodation development at Sheffield Broad Street.

“Payment of the £25m due on completion was delayed due to the difficulties within the banking system,” said Watkin, “but this was received subsequent to the year-end in November and was used to repay £17m of project specific funding and release £9m of additional cash to the business.”

Shareholder funds rose by £11m to £44m.