AIM:WJG

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Market Cap

UK£578.5m

Last Updated

2021/07/28 19:44 UTC

Data Sources

Company Financials +

Executive Summary

Watkin Jones Plc engages in the development and the management of properties for residential occupation in the United Kingdom. More Details


Snowflake Analysis

Excellent balance sheet with moderate growth potential.

Share Price & News

How has Watkin Jones's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WJG is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: WJG's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

0.9%

WJG

2.1%

GB Real Estate

2.0%

GB Market


1 Year Return

59.4%

WJG

30.5%

GB Real Estate

18.4%

GB Market

Return vs Industry: WJG exceeded the UK Real Estate industry which returned 30.5% over the past year.

Return vs Market: WJG exceeded the UK Market which returned 18.4% over the past year.


Shareholder returns

WJGIndustryMarket
7 Day0.9%2.1%2.0%
30 Day7.0%1.2%-1.1%
90 Day-5.4%0.9%1.1%
1 Year67.5%59.4%33.4%30.5%23.7%18.4%
3 Year28.0%14.8%14.5%5.3%11.1%-1.6%
5 Year142.3%103.5%56.8%33.4%41.7%14.4%

Long-Term Price Volatility Vs. Market

How volatile is Watkin Jones's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Watkin Jones undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WJG (£2.3) is trading below our estimate of fair value (£5.89)

Significantly Below Fair Value: WJG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WJG is poor value based on its PE Ratio (29x) compared to the UK Real Estate industry average (19x).

PE vs Market: WJG is poor value based on its PE Ratio (29x) compared to the UK market (23.9x).


Price to Earnings Growth Ratio

PEG Ratio: WJG is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: WJG is overvalued based on its PB Ratio (3.5x) compared to the GB Real Estate industry average (1x).


Future Growth

How is Watkin Jones forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

19.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WJG's forecast earnings growth (19.4% per year) is above the savings rate (0.9%).

Earnings vs Market: WJG's earnings (19.4% per year) are forecast to grow faster than the UK market (17% per year).

High Growth Earnings: WJG's earnings are forecast to grow, but not significantly.

Revenue vs Market: WJG's revenue (13.4% per year) is forecast to grow faster than the UK market (5.3% per year).

High Growth Revenue: WJG's revenue (13.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WJG's Return on Equity is forecast to be low in 3 years time (15.2%).


Past Performance

How has Watkin Jones performed over the past 5 years?

9.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WJG has a large one-off loss of £20.8M impacting its March 31 2021 financial results.

Growing Profit Margin: WJG's current net profit margins (5.8%) are lower than last year (10.6%).


Past Earnings Growth Analysis

Earnings Trend: WJG's earnings have grown by 9.9% per year over the past 5 years.

Accelerating Growth: WJG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WJG had negative earnings growth (-52.6%) over the past year, making it difficult to compare to the Real Estate industry average (13.6%).


Return on Equity

High ROE: WJG's Return on Equity (11.9%) is considered low.


Financial Health

How is Watkin Jones's financial position?


Financial Position Analysis

Short Term Liabilities: WJG's short term assets (£339.9M) exceed its short term liabilities (£114.6M).

Long Term Liabilities: WJG's short term assets (£339.9M) exceed its long term liabilities (£186.5M).


Debt to Equity History and Analysis

Debt Level: WJG's debt to equity ratio (33.5%) is considered satisfactory.

Reducing Debt: WJG's debt to equity ratio has increased from 19% to 33.5% over the past 5 years.

Debt Coverage: WJG's debt is well covered by operating cash flow (33%).

Interest Coverage: WJG's interest payments on its debt are well covered by EBIT (9.9x coverage).


Balance Sheet


Dividend

What is Watkin Jones's current dividend yield, its reliability and sustainability?

2.27%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WJG's dividend (2.27%) is higher than the bottom 25% of dividend payers in the UK market (1.3%).

High Dividend: WJG's dividend (2.27%) is low compared to the top 25% of dividend payers in the UK market (3.97%).


Stability and Growth of Payments

Stable Dividend: WJG has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: WJG's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (125.8%), WJG's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WJG's dividends in 3 years are forecast to be covered by earnings (50.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

11.5yrs

Average management tenure


CEO

Richard Simpson (45 yo)

2.5yrs

Tenure

UK£537,044

Compensation

Mr. Richard C. Simpson has been the Chief Executive Officer at Watkin Jones Plc since January 1, 2019 and has been its Director since January 2, 2019. Mr. Simpson served as Group Property Director of The U...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD745.39K) is about average for companies of similar size in the UK market ($USD970.52K).

Compensation vs Earnings: Richard's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: WJG's management team is seasoned and experienced (11.5 years average tenure).


Board Members

Experienced Board: WJG's board of directors are considered experienced (5.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Watkin Jones Plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Watkin Jones Plc
  • Ticker: WJG
  • Exchange: AIM
  • Founded: 1791
  • Industry: Real Estate Development
  • Sector: Real Estate
  • Market Cap: UK£578.498m
  • Shares outstanding: 253.17m
  • Website: https://www.watkinjonesplc.com

Number of Employees


Location

  • Watkin Jones Plc
  • 7-9 Swallow Street
  • London
  • Greater London
  • W1B 4DE
  • United Kingdom

Listings


Biography

Watkin Jones Plc engages in the development and the management of properties for residential occupation in the United Kingdom. The company operates through Student Accommodation, Build to Rent, Residential...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/28 19:44
End of Day Share Price2021/07/28 00:00
Earnings2021/03/31
Annual Earnings2020/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.