"A flight to quality" is driving demand for new student accommodation, says Watkin Jones ' (WJG) eponymous chief executive Mark Watkin Jones. That's good news for the specialist developer, which sold seven student accommodation developments worth £216m during the six months to the end of March 2017. What's more, 10 student developments are scheduled for completion during FY2018. Half of these are forward sold, while the remainder are in legal negotiation for sale.
As expected, revenue was down on the previous year. This was due to the timing of forward development sales and non-repeating inventory sales of completed residential apartments during the previous period. Adjusted operating profit was 14 per cent to the good at £19.4m, even when you disregard the £26m of IPO-related costs incurred during the comparable period. Gross margins were also higher at 21.8 per cent, up from 16.1 per cent. Mr Watkin Jones attributes this to increased demand for high-quality student accommodation.