Revenue and profit at Watkin Jones tumbled in the first half (H1) of its 2023 financial year compared with the six months ending 31 March 2022.
This was due in part to a £28m “exceptional charge” booked to cover potential costs of remedial work required under the new Building Safety Act, the London Stock Exchange-listed company announced today.
Adjusted pre-tax profit slumped by 97.4 per cent, falling year-on-year from £11.4m to £300,000.
Gross profit fell by 46.2 per cent year-on-year from £29.9m to £16.1m, and adjusted operating profit was down sharply from the £14.6m recorded in H1 2022 to £1.8m. Watkin Jones partly attributed this to additional costs incurred on a development in Exeter after the original third-party main contractor DNA IC collapsed into liquidation in January this year.
Revenue dropped year-on-year by 20.3 per cent from £193m to £154m. Watkin Jones stated that no new forward sales were made in H1 2023.
Watkin Jones shed about 10 per cent of its workforce in November 2022 and Construction News reported two months later that chief executive Richard Simpson refused to rule out further redundancies.
However, in response to the latest results, he 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.”
On the same day as its H1 results announcement, Watkin Jones also announced the forward sale of an 819-bed purpose-built student accommodation scheme in Bristol to KKR.
“Completion of the first forward fund transaction of FY23 [Fiscal Year 2023] reinforces confidence in recovery in the medium term,” the company stated.