Watkin Jones shares were in free fall on Wednesday after the build-to-rent and student accommodation company said remedial work and slow market conditions would impact earnings.
Watkin Jones shares were down around 36% at the time of writing.
The company announced it may fail to complete targeted forward sales deals by fiscal year-end due to rising interest rates and low market liquidity. Watkin Jones also plans to take a £10 million impairment charge on certain assets given the increased cost of funding and macro-economic backdrop.
With property sales stalled, Watkin Jones said it likely won’t materially improve on its £2 million underlying pre-tax profit recorded in the first half of the year. For fiscal 2024, it forecasts a profit before tax of £15-20 million.
Adding to its woes, Watkin Jones aims to boost provisions for remedial work on legacy properties by £30-35 million, spread over five years. This follows its decision to sign the UK government’s Responsible Actors Scheme to reimburse funds for rectifying safety issues in residential buildings.
Its net cash position is £36 million and the company says its balance sheet will allow for a degree of agility going forward.