AIM:WJG

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Excellent balance sheet and fair value.

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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.4%

WJG

-3.5%

GB Real Estate

-5.4%

GB Market


1 Year Return

25.1%

WJG

26.8%

GB Real Estate

2.0%

GB Market

Return vs Industry: WJG underperformed the UK Real Estate industry which returned 28% over the past year.

Return vs Market: WJG exceeded the UK Market which returned 1.4% over the past year.


Shareholder returns

WJGIndustryMarket
7 Day-3.4%-3.5%-5.4%
30 Day10.1%0.03%-4.2%
90 Day18.3%7.8%-2.6%
1 Year29.6%25.1%30.1%26.8%7.6%2.0%
3 Year101.8%81.9%4.8%-2.6%11.4%-2.7%
5 Yearn/a23.1%9.1%29.0%-0.6%

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?

28.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WJG (£2.72) is trading below our estimate of fair value (£3.82)

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 (17.2x) compared to the Real Estate industry average (17.1x).

PE vs Market: WJG is good value based on its PE Ratio (17.2x) compared to the UK market (17.7x).


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 (3.9x) compared to the GB Real Estate industry average (1.1x).


Next Steps

Future Growth

How is Watkin Jones forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

11.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WJG's forecast earnings growth (11.2% per year) is above the savings rate (0.5%).

Earnings vs Market: WJG's earnings (11.2% per year) are forecast to grow slower than the UK market (13% per year).

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

Revenue vs Market: WJG's revenue (10.6% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: WJG's revenue (10.6% 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 high in 3 years time (23.8%)


Next Steps

Past Performance

How has Watkin Jones performed over the past 5 years?

28.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WJG has a high level of non-cash earnings.

Growing Profit Margin: WJG's current net profit margins (10.8%) are lower than last year (12.2%).


Past Earnings Growth Analysis

Earnings Trend: WJG's earnings have grown significantly by 28.7% 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 (-8.8%) over the past year, making it difficult to compare to the Real Estate industry average (2%).


Return on Equity

High ROE: WJG's Return on Equity (22.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Watkin Jones's financial position?


Financial Position Analysis

Short Term Liabilities: WJG's short term assets (£289.9M) exceed its short term liabilities (£95.8M).

Long Term Liabilities: WJG's short term assets (£289.9M) exceed its long term liabilities (£41.1M).


Debt to Equity History and Analysis

Debt Level: WJG's debt to equity ratio (20.9%) is considered satisfactory.

Reducing Debt: WJG's debt to equity ratio has increased from 17.5% to 20.9% over the past 5 years.

Debt Coverage: WJG's debt is well covered by operating cash flow (47.7%).

Interest Coverage: WJG's interest payments on its debt are well covered by EBIT (195.9x coverage).


Balance Sheet

Inventory Level: WJG has a high level of physical assets or inventory.

Debt Coverage by Assets: WJG's debt is covered by short term assets (assets are 7.9x debt).


Next Steps

Dividend

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

3.07%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.9%markettop25%5.4%industryaverage2.5%forecastin3Years4.2%

Current dividend yield vs market & industry

Notable Dividend: WJG's dividend (3.08%) is higher than the bottom 25% of dividend payers in the UK market (1.9%).

High Dividend: WJG's dividend (3.08%) is low compared to the top 25% of dividend payers in the UK market (5.34%).


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 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52.9%), WJG's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WJG's dividends in 3 years are forecast to be well covered by earnings (49.9% payout ratio).


Next Steps

Management

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

12.6yrs

Average management tenure


CEO

Richard Simpson (43yo)

1.1yrs

Tenure

0

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 ...


Leadership Team

NamePositionTenureCompensationOwnership
Philip Byrom
CFO, Company Secretary & Director3.9yrsUK£473.46k1.02% £7.1m
Richard Simpson
CEO & Director1.1yrsno data0.093% £642.8k
Alex Pease
Investment Director0yrsno datano data
Geraint Morgan
Managing Director of Student Accommodation South West & South Wales0yrsno datano data
Berwyn Evans
Managing Director of Homes Division15.1yrsno datano data
Graham Davies
Managing Director of Student Accommodation North West & Midlands0yrsno datano data
Andrew McDonough
Managing Director of Student Accommodation North & South0yrsno datano data
Jim Davies
Managing Director of Newmark Developments10.1yrsno datano data
Rebecca Hopewell
Chief Executive Officer of Fresh Property Group0yrsno datano data

12.6yrs

Average Tenure

Experienced Management: WJG's management team is seasoned and experienced (12.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Philip Byrom
CFO, Company Secretary & Director3.9yrsUK£473.46k1.02% £7.1m
Richard Simpson
CEO & Director1.1yrsno data0.093% £642.8k
Simon Laffin
Independent Non-Executive Director4yrsUK£52.00k0.039% £272.0k
Grenville Turner
Independent Non-Executive Chairman4yrsUK£125.00k0.13% £927.3k
Liz Reilly
Independent Non-Executive Director1.1yrsno datano data

3.9yrs

Average Tenure

57.5yo

Average Age

Experienced Board: WJG's board of directors are considered experienced (3.9 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.


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£694.220m
  • Shares outstanding: 255.23m
  • Website: https://www.watkinjonesplc.com

Number of Employees


Location

  • Watkin Jones Plc
  • Llandygai Industrial Estate
  • Bangor
  • Gwynedd
  • LL57 4YH
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WJGAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPMar 2016

Biography

Watkin Jones plc engages in the development and the management of properties for residential occupation in the United Kingdom. It develops and constructs multi occupancy property assets focusing on student accommodations. The company operates through Student Accommodation, Build To Rent, Residential, and Accommodation Management segments. It is also involved in the management of student accommodation property; development of traditional residential property; and development of build to rent accommodation. The company was formerly known as Watkin Jones Limited and changed its name to Watkin Jones plc in March 2016. Watkin Jones plc was founded in 1791 and is headquartered in Bangor, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 23:28
End of Day Share Price2020/02/26 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


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.