Watkin Jones plc

(the 'Group')

HY Results for the six months ended 31 March 2026

Operational progress & proactive strategy for continued diversification

The Group announces its interim results for the half year ended 31 March 2026 ('HY26' or 'the period').

(1)   For HY26 Adjusted Profit before tax and Adjusted Earnings per share are calculated before the impact of an exceptional finance cost of £0.9 million (HY25: £1.1 million) for the unwinding of the discount rate on the Building Safety provision.

(2)   Adjusted net cash is stated after deducting interest bearing loans and borrowings, but before deducting IFRS 16 operating lease liabilities of £31.1 million as at 31 March 2026 (31 March 2025: £37.4 million).

 HY26 Highlights

·    Revenue of £100.2 million delivered primarily from in-build schemes:

-    Two new transactions during the period - a further PBSA scheme in Bristol and a scheme to deliver a hotel on a brownfield site in Wimbledon

·    Operating profit of £0.4 million:

-    Strong construction delivery, at margins in line with previous guidance, including the initial contribution from the sale of our Bristol scheme supported by our diversified routes to market.

-    Continued effective cost management despite inflationary pressures.

·    Further operational progress, despite the challenging backdrop:

-    Achieved planning on c.800 new living units in the period

-    Growth of 20% in Development Partnership and Refresh pipeline

·    Maintained focus on cash management:

-    Period end gross and adjusted net cash balances of £67.1 million and £61.3 million, respectively.

·    Further progress on building safety:

-    Successful achievement of Gateway 2 at four sites during the period, benefiting from early engagement with the Building Safety Regulator

-    Reduced net provision of £38.0 million

Outlook

·    Whilst we monitor the evolving geopolitical and economic backdrop and the consequential impacts on both market confidence and liquidity, the Group continues to focus on the factors within our control:

-    successfully delivering our in-build projects

-    carefully managing our costs and cash, in particular with earlier procurement of selected sub-contract packages and forward buying of materials to mitigate inflationary pressures

-    accelerating the move into Development Partnerships and Refresh where we are refocusing and optimising utilisation of the Group's resources and capitalising on the business' end-to-end capabilities

·    Total secured pipeline of c.£1.3 billion, including c.£300 million of contractually secure forward sold revenue as at 31 March 2026, of which c.£90 million is for delivery in the second half of this year.

·    Several schemes are currently being marketed which have the potential to underpin delivery of an improved second half performance:

-    Mix of forward fund, Development Partnership and Refresh schemes

-    Number and type of transactions executed in H2, will have significant bearing on FY outturn

·    Potential for the business over medium term remains attractive, as we exploit our expertise in the residential sector and also diversify into adjacent sectors and new funding structures.

Alex Pease, Chief Executive Officer of Watkin Jones, said:

"We have achieved a resilient performance in the first half, underpinned by strong operational delivery and a proactive approach to cost and cash management. Our integrated platform continues to be a key differentiator, enabling us to identify incremental opportunities to deploy capabilities and diversify revenues across Development Partnerships, Refresh and adjacent sectors.

While market conditions remain challenging and continue to impact the pace of recovery, the long-term fundamentals of our end markets remain attractive, and our flexibility, strong pipeline and capital-light model positions us well to navigate the near-term market conditions and create value for our stakeholders in the future."

Analyst meeting

There will be a pre-recorded audiocast of the HY26 Results presentation available to view on the Group's website (www.watkinjonesplc.com) from 7am (BST) today.  At 9.30am (BST), there will be a live 30-minute Q&A webcast for sell-side analysts, hosted by Alex Pease (CEO) and Simon Jones (CFO).  Those analysts wishing to join and receive dial in details should register their interest via MHP.

For further information:

Media enquiries:

Notes to Editors

Watkin Jones is the UK's leading developer and manager of residential for rent, with a focus on the build to rent, student accommodation and affordable housing sectors. The Group has strong relationships with institutional investors, and a reputation for successful, on-time-delivery of high-quality developments.  Since 1999, Watkin Jones has delivered over 51,000 student beds across 150 sites, making it a key player and leader in the UK purpose-built student accommodation market, and is increasingly expanding its operations into the build to rent sector, where it has delivered 3,400 apartments across 19 schemes to date.  In addition, Fresh, the Group's specialist accommodation management business, manages significantly more than 21,000 student beds and build to rent apartments on behalf of its institutional clients.  Watkin Jones has also been responsible for over 80 residential developments, ranging from starter homes to executive housing and apartments.

The Group's competitive advantage lies in its experienced management team and capital-light business model, which enables it to offer an end-to-end solution for investors, delivered entirely in-house with minimal reliance on third parties, across the entire life cycle of an asset.

Watkin Jones was admitted to trading on AIM in March 2016 with the ticker WJG.L.  For additional information please visit www.watkinjonesplc.com.

Review of Performance

Results for the six months to 31 March 2026

Revenues for the period were £100.2 million (HY25: £129.2 million).  Operationally the Group's businesses have continued to perform well, with our developments on site progressing in line with expectations.  The decrease in revenues reflects the sustained lower level of transactional activity. Development Partnerships contributed £43.8m (HY25: £32.3m) of revenue in the period.

Gross profit was £9.3 million (HY25: £14.4 million), with gross margin at 9.3% slightly behind the prior year (HY25: 11.1%) due to change in mix of schemes on site and transaction structures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Operating profit for the period on both a statutory and adjusted basis was £0.4 million (HY25: £0.4 million), with the sale of our Bristol development, executed as a disposal of a subsidiary rather than a traditional land sale, offsetting the reduction in revenues.  

Net finance costs for the period were £1.3 million (HY25: £1.3 million).  Finance costs include £0.6 million (HY25: £0.8 million) in respect of the interest on leases, and a discount rate unwind of £0.9 million (HY25: £1.1 million).

Loss before tax for the period was £0.9 million (HY25: loss before tax of £0.9 million).  Our adjusted result before tax for the period, which excludes the exceptional finance costs of £0.9 million relating to the discount rate unwind, was at breakeven (HY25: £0.2 million).  Adjusted basic earnings per share for the period were 0.01 pence, compared to 0.05 pence for HY25.

Segmental review

Build to Rent ('BTR')

Revenues from BTR decreased by 42.4% in the period to £52.0 million (HY25: £90.3 million), reflecting the completion of three schemes in FY25.  Revenues were derived from the build-out of our forward sold developments, which are progressing well and on track for their respective completions.  

Gross profit for the period was £6.5 million (HY25: £7.4 million), with the gross margin improved from the prior year to 12.5% (HY25: 8.2%), reflecting the margin mix of live schemes.

Student accommodation ('PBSA')

Revenues from PBSA were higher than last year at £33.2 million (HY25: £25.6 million) reflecting our Glasgow and Bristol developments, recently sold into our joint venture with Maslow Capital, having commenced on site, supported by further strong build progress from our other live schemes.  

PBSA gross profit for the period was £0.9 million (HY25: £3.9 million) with operating margin for the period at 17.4% (HY25: 15.2%) including the sale of our Bristol development.

Refresh

Refresh, our asset refurbishment division, continues to build its reputation in the market, with an increased total pipeline of c.£135 million.

Accommodation management (Fresh)

Fresh achieved revenues of £4.6 million (HY25: £4.2 million), with units under management increasing to over 21,000. Eight new schemes were being mobilised at the period end, which will add a further c.1,700 beds in the second half.

Gross profit increased to £2.6 million (HY25: £2.3 million), with the modest improvement in margin of 56.5% (HY25: 55.1%) reflecting strong cost control in light of inflationary increases across operating expenses.

Academic year 2026/27 leasing is tracking in line with prior year. However, outturn occupational performance across PBSA markets remains uncertain driven by reductions in international student recruitment and affordability. Our expectation is that demand will remain focussed on higher ranked higher education institutions, and locations which align with these institutions will outperform.

Single family homes

The affordable-led Single family homes business continued to make good progress at our development partnership site in St Helens. Revenue increased to £7.9 million benefitting from a full year on site at this scheme (HY25: £4.8 million).

The gross profit achieved by the division increased as a result of higher revenues to £0.5 million (HY25: £0.3 million), at consistent margins of 6.3% (HY25: 6.3%).

Balance sheet and liquidity

Our financial position and liquidity remain strong.  We had a gross cash balance at 31 March 2026 of £67.1 million (31 March 2025: £86.8 million), whilst net cash stood at £61.3 million (31 March 2025: £73.4 million), before deducting IFRS 16 lease liabilities.

The Group had undrawn headroom of £43.9 million on its revolving credit facility ('RCF') with HSBC at 31 March 2026, giving total cash and available facilities of £111.0 million, with a further optional £10.0 million accordion facility.

Our strong liquidity position is the result of effective working capital management and collection of retentions and bullet payments on completed schemes, offset by the impact of our normal annual cash profile, which sees a higher utilisation of cash in the first half of the year.   Our inventory and work in progress balance increased by a net £4.8 million, to £91.7 million since 30 September 2025 as a result of enabling works we have carried out on sites we have in the market.

Contract assets and receivables at 31 March 2026 stood at £27.8 million and £28.9 million and had decreased  £1.3 million and £12.1 million respectively from the position at 30 September 2025.  The contract assets relate primarily to the final payments to be received on completion of the forward sold developments in build, increasing as developments progress.  Contract and trade liabilities amounted to £80.9 million at 31 March 2026 and had decreased by £6.3 million since the FY25 year-end position.

Building Safety

We continue to focus on the delivery of our building safety rectification obligations and have completed works on two buildings in the period with cash spend in line with expectations.  As previously reported, there remains significant uncertainty in this area across the sector and, as for many other participants in our industry, assets in scope and the scope and cost of works continue to evolve.

We will continue to monitor this as discussions with building owners and building investigations continue.  We have utilised £9.4 million net of contributions received from our Building Safety provision in HY26, with the discount on the provision also being unwound by £0.9 million, resulting in a net provision at 31 March 2026 of £38.0 million.

ESG

Following the successful culmination of our Future Foundations Strategy in FY24/25, we launched a new set of objectives this year. This renewed strategy introduces a sharper focus on areas such as Social Value and uplifts some of our previous targets around Considerate Constructor and BREEAM.

All core sites remain on target to deliver our uplifted targets in relation to BREEAM (Excellent) and Considerate Constructors (Excellent), and our hybrid plant strategy continues to deliver significant carbon savings.

Our Fresh colleagues have recently delivered a record NPS of +38 - significantly in advance of new target of +30 - also receiving platinum global student living index accreditation.

Our work with Mind continues, with fund raising efforts from our recent Supplier Conference demonstrating the alignment and support of our wider supply chain for our ESG objectives.

Dividend

The Board is continuing to prioritise the maintenance of financial flexibility during this period of market disruption and consequently is not declaring an interim dividend; the Board will keep this approach under review.

Outlook

We continue to focus on the factors within our control such as managing the delivery of our in-build schemes, controlling costs and cash and broadening our revenue base whilst mindful of the uncertain geo-political backdrop and impact on market sentiment.

During the second half, these will continue to be our priorities together with increased focus on forward procurement of key sub-contract packages and forward buying of materials to help mitigate the expected inflationary pressures as well as focusing on the successful divestment of the schemes that we have in the market. Whilst the market for these assets remains challenging, our schemes are attracting interest with a number of further forward sales from this pipeline required in H2 26 to enable delivery of full year performance in line with current market expectations.

Alex Pease

Chief Executive Officer

27 May 2026

Consolidated Statement of Comprehensive Income

for the six month period ended 31 March 2026 (unaudited)

Consolidated Statement of Comprehensive Income

for the year ended 30 September 2025

Consolidated Statement of Financial Position

as at 31 March 2025 (unaudited)

Consolidated Statement of Changes in Equity

for the six month period ended 31 March 2026 (unaudited)

Consolidated Statement of Cash Flows

for the six month period ended 31 March 2026 (unaudited)

Notes to the consolidated financial information

1.            General information

Watkin Jones plc (the 'Company') is a limited company incorporated in the United Kingdom under the Companies Act 2006 (Registration number 09791105).  The Company is domiciled in the United Kingdom and its registered address is 12 Soho Square, London, W1D 3QF.

The principal activities of the Company and its subsidiaries (collectively the 'Group') are the development and management of multi-occupancy residential rental properties.

The consolidated interim financial statements of the Group for the six-month period ended 31 March 2026 comprises the Company and its subsidiaries.  The basis of preparation of the consolidated interim financial statements is set out in note 2 below.

The financial information for the six months ended 31 March 2026 is unaudited.  It does not constitute statutory financial statements within the meaning of Section 434 of the Companies Act 2006.  The consolidated interim financial statements should be read in conjunction with the financial information for the year ended 30 September 25 which has been prepared in accordance with international accounting standard in conformity with the requirements of the Companies Act 2006.  The report of the auditors on those financial statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) of the Companies Act 2006.

This report was approved by the directors on 26 May 2026.

2.            Basis of preparation

This set of condensed consolidated interim financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the UK.  The interim financial statements have been prepared based on the UK adopted International Financial Reporting Standards "IFRS" that are expected to exist at the date on which the Group prepares its financial statements for the year ended 30 September 2026.  To the extent that IFRS at 30 September 2026 do not reflect the assumptions made in preparing the interim financial statements, those financial statements may be subject to change.

The interim financial statements have been prepared on a going concern basis and under the historical cost convention.

The interim financial statements have been presented in pounds sterling and all values are rounded to the nearest thousand (£'000), except when otherwise indicated.

The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Although these estimates are based on management's best knowledge of the amount, event or actions, actual events may ultimately differ from those estimates.

The interim financial statements do not include all financial risk information and disclosures required in the annual financial statements and they should be read in conjunction with the financial information that is presented in the Company's audited financial statements for the year ended 30 September 2025.  There has been no significant change in any risk management policies since the date of the last audited financial statements.

Going concern

At 31 March 2026, the Group had a robust liquidity position, with cash and available headroom in its banking facilities totalling £111.0 million made up of cash balances of £67.1 million and RCF headroom of £43.9 million. The RCF can be used for the acquisition of land and associated development works, and allows for a further £10.0 million accordion option within the facility.

Good liquidity has been maintained through the period, providing the Group with a good level of cash and available banking facilities for the year ahead.

Group forecasts have been prepared that have considered the Group's current financial position and market circumstances.  We have prepared a base case cash flow for the period to 30 June 2027 which is aligned to the Group's business plan and trading assumptions for that period.  Our currently secured cash flow, derived from our forward sold developments and other contracted income, net of overheads and tax, results in utilisation over the forecast period albeit our cash position remains resilient.  In addition to the secured cash flow, the base case forecast assumes a number of new sales which, if achieved, will improve that liquidity position.

In addition to the base case forecast, we have considered the possibility of prolonged disruption to the forward sale market given the market turbulence seen in the UK over recent years.  This is our most significant risk as it would greatly limit our ability to achieve any further disposals.  We have run a reasonable downside scenario to assess the possible impact of the above risks, such that forward sales and new site acquisitions are delayed by up to six months.  The cash forecast prepared under this scenario illustrates that adequate liquidity is maintained through the forecast period and the financial covenants under the RCF would still be met.

The minimum total cash and available facilities balance under this scenario is £70.4 million (excluding the £10.0 million accordion facility).

We consider the likelihood of events occurring which would exhaust the total cash and available facilities remaining to be remote. However,  should such events occur, management would be able to implement reductions in discretionary expenditure and consider the sale of the Group's land sites to ensure that the Group's liquidity was maintained.

Based on the thorough review and robust downside forecasting undertaken, and having not identified any material uncertainties that may cast any significant doubt, the Board is satisfied that the Group will be able to continue to trade for the period to 30 June 2027 and has therefore adopted the going concern basis in preparing the financial statements.

Building Safety Provision

The Group holds a provision for building safety remedial works, for which the legislative and construction background was disclosed in the Group's audited financial statements for the year ended 30 September 2025.

This is a highly complex area with significant estimates in respect of the cost of remedial works, the quantum of any legal expenditure associated with the defence of the Group's position in this regard, and the extent of those properties within the scope of the applicable government guidance and legislation, which continues to evolve.  All our buildings were signed off by approved inspectors as compliant with the relevant Building Regulations at the time of completion.

The amount provided for these works has been estimated by reference to recent industry experience and external quotes for similar work identified.  The investigation of the works required at many of the buildings is at an early stage and, therefore, it is possible that these estimates may change over time or if government legislation and regulation further evolves.

As a number of other housebuilders and developers have done over the last 12 months, we have included an additional amount of contingency within our provision to reflect further buildings being identified as requiring remediation, or for unforeseen remediation costs beyond management's current knowledge.  We have also implemented a consistent contingency policy across the properties where work is yet to start.

We expect this cost to be incurred within the next four financial years, and the provision has been discounted to its present value accordingly.  The timing of this expenditure will be dependent on the timely engagement by building owners, revisions to programme under the new BSA Gateways, and the availability of appropriately qualified subcontractors.

We continue to make progress negotiating contributions from clients to mitigate our liability in relation to these remedial works. At the balance sheet date, we have recognised reimbursement assets of £10.2 million (30 September 2025: £10.3 million).  

At the period end the Group remained in discussions with a number of property owners whereby the legal responsibility or confirmation of fire safety remediation requirements remains uncertain and which, therefore, form part of the Group's contingent liabilities. As referred to above, the clarification of whether these liabilities crystallise is dependent on multiple factors which are expected to be concluded in the next 12 to 24 months.

At the same time, the Group continues to explore opportunities to recover the costs of remediation through the Group's insurance providers and supply chain. However, no benefit has been assumed within the provision unless contractual terms have been established.

We will continue to keep abreast of any changes to legislation and guidance, recognising that the approach to building safety continues to evolve.

Of the outstanding net provision, £2.2 million is fixed as a result of legal settlements agreed with building owners. However, for the remaining liabilities, should the costs associated with these remedial works increase by 10%, the provision required would increase by £3.4 million.  Should the discount rate applied to the calculation reduce by 1%, the provision required would increase by £0.5 million.  Further details of the provision are set out in note 7.

Remedial works required on any property identified will range in cost. Whilst liabilities could be higher than recent experience, in the last two years, following detailed diligence with respect to scope of works, the range of liabilities has been between a net cost of £nil and c.£2 million, and the average net cost has been £0.9 million for properties requiring remediation.

3.         Accounting policies

The accounting policies used in preparing these interim financial statements are the same as those set out and used in preparing the Company's audited financial statements for the year ended 30 September 2025.

4.         Segmental reporting

The Group has identified six segments for which it reports under IFRS 8 'Operating segments', as follows:

A       Student accommodation - the development of purpose-built student accommodation;

B       Build to rent - the development of build to rent accommodation;

C       Single family homes (formerly "Affordable homes") - the development of affordable residential housing for sale;

D       Refresh - the refurbishment, redevelopment and repurposing of existing accommodation;

E       Accommodation management - the management of student accommodation and build to rent property; and

F       Corporate - revenue from the development of commercial property forming part of mixed-use schemes and other revenue and costs not solely attributable to any one other operating segment.

Performance is measured by the Board based on gross profit as reported in the management accounts.  Apart from inventory and work in progress, no other assets or liabilities are analysed into the operating segments.

Disposal of subsidiary

During the period ended 31 March 2026 the Group sold its former subsidiary Malago Road Bristol Limited to a related party, the joint venture controlled by The Ard Malago Holdings Limited. On disposal the subsidiary had net assets of £nil, with a profit on disposal recognised of £4,886,000. As part of the transaction, a related party loan of £620,000 was settled between the Group and Malago Road Bristol Limited. The subsidiary held no cash or cash equivalents at the point of disposal.

5.         Disaggregated revenue information

6.         Exceptional costs

No further exceptional administrative expenses related to the Building Safety provision have been incurred in the period ended 31 March 2026.  The provision made in the prior year has been unwound to its present value, resulting in finance costs of £901,000 in this period.

7.         Provisions

Building Safety provision

The provision is classified as follows:

A net provision of £46,432,000 was held at 30 September 2025 for the Group's anticipated contribution towards the cost of building safety remedial works.

No new net provision has been recognised during the period ended 31 March 2026.

The net provision at 31 March 2026 amounts to £37,974,000, of which £12,865,000 is expected to be incurred in the next twelve months to 31 March 2027, with £25,109,000 expected to be incurred between 1 April 2027 and 30 September 2029.  The provision has been discounted to its present value accordingly, at a risk-free rate of 4.42% based on UK five-year gilt yields (2025: 4.15%).

The judgements and estimates surrounding this provision and corresponding reimbursement assets are set out in note 2.

8.         Income taxes

The tax expense for the period has been calculated by applying the expected effective tax rate for the financial year ending 30 September 2026 of 25.00% to the profit for the period.

9.         Earnings per share

Basic earnings per share ("EPS") amounts are calculated by dividing the net profit or loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares in issue during the year.

The following table reflects the income and share data used in the basic EPS computations: