Watkin Jones has cut its profit expectations and now only expects to break even for the year ending September 30, 2023.
The build-to-rent specialist warned in a trading update that fresh cost pressures meant it would no longer hit the expected pre-tax profit of £2m, which was reported in its last profit warning in July.
“From [July] commercial update, the group has incurred certain additional costs, including acceleration costs to ensure the successful completion of two schemes,” he noted.
He added: “The group successfully met its operating targets for the second half of the year, with the practical completion of four schemes in the last quarter and the sale of its three non-core PRSs. [private rented sector] operational assets”.
The company expects to report around £400m in revenue for the financial year. At last update, it reported £43m in net current cash, including £9m raised from asset sales. It also expects to have saved more than £2m as a result of cost reviews carried out since July’s business update.
The latest update also forecast pre-tax profits of £15m to £20m in the 2024 financial year, despite ongoing “difficult market conditions”.
It added that it did not expect to incur additional costs to repair legacy properties, after announcing it would spend an extra £30m in July.
Chief executive Richard Simpson stepped down immediately after the July profit notice, with Alex Pease acting as interim boss.
