Full Year Results

Watkin Jones plc

16 December 2025

 

16 December 2025

Watkin Jones plc

('Watkin Jones' or the 'Group')

Full Year Results for the year ended 30 September 2025

Resilient FY25 performance with £2bn of future pipeline opportunities

The Group announces its annual results for the year ended 30 September 2025 ('FY25').

	Adjusted Results (1), (2)		Statutory Results
	FY25	FY24	FY25	FY24
Revenue	£279.8m	£362.4m	£279.8m	£362.4m
Gross profit	£26.5m	£33.8m	£19.4m	£33.8m
Operating profit/(loss)	£6.3m	£10.6m	£(5.8m)	£3.6m
Profit / (loss) before tax	£5.6m	£9.2m	£(8.7m)	£(0.3m)
Basic earnings / (loss) per share	2.3p	3.5p	(3.3p)	0.7p
Adjusted net cash3	£70.5m	£83.4m

(1)   For FY25 Adjusted gross profit, Adjusted operating profit, Adjusted profit before tax and Adjusted earnings per share are calculated before the impact of exceptional charges of £7.1 million of land and asset impairments within Cost of sales, £5.0 million provided for remedial costs associated with building safety within Administrative expenses, and £2.2 million for the unwinding of the discount rate on the building safety provision within Finance costs.

(2)   For FY24 Adjusted operating profit, Adjusted profit before tax and Adjusted earnings per share are calculated before the impact of exceptional charges of £7.0 million provided for remedial costs associated with building safety within Administrative expenses and £2.5 million for the unwinding of the discount rate on the building safety provision within Finance costs.

(3)   Adjusted net cash is stated after deducting interest bearing loans and borrowings, but before deducting IFRS 16 operating lease liabilities of £33.6 million at 30 September 2025 (30 September 2024: £40.8 million).

FY25 Highlights

·    Revenue of £279.8 million:

-    Predominantly derived from previously sold developments on site together with three new development partnerships entered into during the period;

·    Good pipeline progression:

-    Entry into a number of innovative transaction structures including development partnership to deliver a 260-unit aparthotel in Southwark and Glasgow Joint Venture delivering 784 beds;

-    Achieved planning for a further c.1,140 PBSA and c.230 BTR units, across three schemes; and

-    Secured three BTR development sites to deliver c.1,100 units, subject to planning.

·    Adjusted operating profit of £6.3 million, reflecting:

-    Delivery in line with margin guidance on previously sold developments, including the successful practical completion of four schemes;

-    Initial contribution from transactions signed in the year; and

-    Effective cost management.

·    Continued focus on cash management:

-    Gross and adjusted net cash balances of £80.4 million and £70.5 million respectively, with a further £10.3 million of cash received from our Glasgow transaction shortly after the year end.

·    The provision for building safety works, net of contributions from building owners, decreased by £1.6 million to £46.4 million:

-    Cash outflow of £8.8 million, in line with expectations, including completion of remediation works on six buildings; and

-    Additional provision of £5.0 million.

·    Non-cash impairment charge of £7.1 million in relation to two balance sheet assets.

Outlook

·    Enter the coming year with encouraging visibility provided by c.£340 million of contractually secured forward sold revenue for FY26 and future years, and total development pipeline opportunities of c.£2 billion.

·    Contracts exchanged at our PBSA scheme in Bristol to deliver 484 student beds, conditional on receipt of Gateway 2 approval.

·    Recently signed letter of intent and team onsite to deliver a 294-unit aparthotel in Wimbledon representing c.£40 million of future revenue.  

·    An active pipeline of development partnerships and Refresh opportunities in line with our diversification strategy.

·    Remain focused on the business performance drivers that are within our control:

-    Successfully delivering our in-build projects;

-    Carefully managing our costs and cash; and

-    Continuing to broaden our revenue base with new sources of income.

·    Medium term outlook for our sectors remains attractive, with market fundamentals continuing to drive investor sentiment and allocations.

Alex Pease, Chief Executive Officer of Watkin Jones, said:

"FY25 has seen the benefits of our evolved strategy help mitigate some of the effects of the challenging backdrop over the last three years. This resilient performance reflects a combination of strong operational delivery, a more agile approach to transactional structuring, and the increasing contribution from our diversified activities.

With a strong pipeline, highly skilled and motivated workforce and continued revenue diversification, we enter 2026 with confidence in the strength of our operational platform and our ability to create long-term value for our stakeholders."

Analyst meeting

There will be an in-person presentation for analysts at 09:30am today, Tuesday 16th December, at the offices of MHP Group, 60 Great Portland Street, London W1W 6RT, as well as a webcast and conference call with a facility for Q&A for virtual attendees. For webcast / conference call details, please contact [e-mail]. A copy of the Full Year results presentation is available on the Group's website: http://www.watkinjonesplc.com.

- ENDS -

For further information:

Watkin Jones plc
Alex Pease, Chief Executive Officer	Tel: [phone]
Simon Jones, Chief Financial Officer	[e-mail]
Peel Hunt LLP (Nominated Adviser & Joint Corporate Broker)	Tel: [phone]
Mike Bell / Ed Allsopp	www.peelhunt.com
Singer Capital Markets (Joint Corporate Broker)	Tel: [phone]
Sara Hale / Graham Hertrich / James Todd	www.singercm.com

Media enquiries:

MHP (Financial PR)
Reg Hoare / Rachel Farrington / Catherine Chapman	Tel: [phone]
	[e-mail]

Notes to Editors

Watkin Jones is the UK's leading developer and manager of residential for rent, with a focus on the build to rent, student accommodation and affordable housing sectors. The Group has strong relationships with institutional investors, and a reputation for successful, on-time-delivery of high-quality developments. Since 1999, Watkin Jones has delivered over 51,000 student beds across 150 sites, making it a key player and leader in the UK purpose-built student accommodation market, and is increasingly expanding its operations into the build to rent sector, where it has delivered 3,400 apartments across 19 schemes to date. In addition, Fresh, the Group's specialist accommodation management business, manages c.21,000 student beds and build to rent apartments on behalf of its institutional clients. Watkin Jones has also been responsible for over 80 residential developments, ranging from starter homes to executive housing and apartments.

The Group's competitive advantage lies in its experienced management team and capital-light business model, which enables it to offer an end-to-end solution for investors, delivered entirely in-house with minimal reliance on third parties, across the entire life cycle of an asset.

Watkin Jones was admitted to trading on AIM in March 2016 with the ticker WJG.L. For additional information please visit www.watkinjonesplc.com.

Chief Executive Officer's review

Alex Pease

Chief Executive Officer

The nature of the Watkin Jones operating model inevitably means that the economic challenges of the last few years and lack of investment liquidity can still be seen in this year's numbers as we deliver on transactions which we first evaluated three to four years ago. If I look at the business today however, the quality of our on-site delivery, the innovative structures seen in our more recent transactions, and the strength of our senior team, I believe Watkin Jones is well positioned to deliver on the strategy set out at the start of 2024, aimed at building a more diversified set of revenue streams alongside our core forward fund model. In particular, I remain confident in our end market sectors across the residential for rent spectrum with strong demand fundamentals and supply which has been severely inhibited in recent times. I am also confident in our ability to innovate, adapt and diversify as new market opportunities present themselves.

Performance

During FY25 we achieved practical completion on four projects, all of which finished on or ahead of schedule. Our strong construction delivery and effective management of build-cost inflation contributed to financial betterments in our projects and as such our gross margin performance. Our current in-build sites are all progressing materially to plan.

Notwithstanding the challenging market conditions, we were able to increase the number of transactions in the year to four (up from two in FY24) to include three development partnership transactions.

We were delighted to announce the sale of a new c.784‑bed purpose built student accommodation scheme in Glasgow (the 'Ard') to a newly created joint venture owned 95% by Maslow Capital and 5% by the Group. This transaction represents a significant further step for the Group as we seek to diversify our business model and create innovative development funding structures.

Our Venti House development in Stratford represents significant progress in our strategy. This 397-bed purpose-built student accommodation scheme, delivered through a joint venture with Housing Growth Partnership, is progressing on schedule and within budget, with practical completion expected in June 2026. We have already launched lettings, opened the show flat, and secured strong early demand, including a nominations agreement in place for 51% of beds. Venti House reflects our commitment to delivering high-quality, well-connected accommodation that meets the evolving needs of students and partners alike.

Group revenue was £279.8 million (FY24: £362.4 million), down 22.8%. Gross profit was £19.4 million (FY24: £33.8 million), while operating profit before exceptional items was £6.3 million (FY24: £10.6 million), supported by our rigorous cost control.

BTR revenues were lower as we built out our forward sold developments, with three schemes reaching practical completion in the year. PBSA revenues were lower, with limited opportunity for land sales and one scheme completing in the year, but benefited from our commencement of the Ard scheme. Our Refresh business had a solid year (see below), and we returned to growth in Fresh, our accommodation management business. The Single Family Homes business benefited from the start of a new development partnership in St Helens.

Loss before tax for the year was £8.7 million (2024: loss of £0.3 million) as a result of fewer transactions and schemes in progress, and the effect of exceptional impairments to certain land and leased assets.

Managing our cash flow and maintaining our balance sheet strength are priorities for us. We remain well financed, with the Group having adjusted net cash of £70.5 million at the year-end (30 September 2024: £83.4 million). Due to some delays in payments, a further c.£10m arrived in our accounts on 1st October. Total cash and available facilities were £130.1million (30 September 2024: £143.2 million).

Strategy

We made further good progress with our strategy, through which we are diversifying our sources of income in residential to rent, driving operational efficiency and ensuring we are a responsible business.

Diversifying our sources of income

Forward selling our own developments remains core to our business. At the same time, we are determined to further broaden our revenue base, reflecting our belief that we can monetise the business better and in more areas. This is giving us an increasingly granular and repeatable income stream that adds to our revenue visibility and gives us a higher level of coverage of our overhead cost base at the start of the year. In the year we were able to increase contributions from our diversified income streams to c.30% of revenues up from c.20% in FY24.

Our vertically integrated platform, which encompasses investment, development, delivery and operation, is a significant advantage for us, particularly in challenging market environments.  We can add value at multiple stages, which enables us to make deals work by taking an appropriate blended margin, while controlling risk at each point in the project lifecycle. Vertical integration also opens up diversification opportunities such as development partnerships and our Refresh business, where a construction capability is essential.

In FY25 we announced three development partnerships, to provide student accommodation, single family homes and an aparthotel, which combines the characteristics of apartments and co-living. These deals secured c.£100 million of revenue over the next three years and we have a significant pipeline of opportunities. The partnerships highlight our ability to work collaboratively with investors and be flexible in how we leverage our skills and experience across all our sub-sectors.

We are now looking at the potential for partnering with universities to support their student accommodation needs.

Our Refresh business continues to gain traction with solid revenues in FY25 and a growing quality pipeline. It can provide the Group with favourable financial profiles, since it is typically quicker to progress these projects to a delivery and revenue generating phase than a typical development project. It also offers a wider range of project sizes, increasing granularity of earnings. By its nature, Refresh has strong sustainability credentials, as it reuses significant levels of materials and increases the lifespan of existing buildings. Our pipeline has increased to £94 million and we are seeing significant interest from potential clients requiring works to existing assets or new clients seeking to acquire 'value add' opportunities. We expect the conversion of opportunities into contracts to gain momentum as we build our track record and we were pleased to secure our first repeat business this year.

Our model also means we are well placed to provide other services to clients, including asset management. In addition to generating income in its own right, this could source new business for Fresh and Refresh. We continue to explore the opportunities here.

Driving operational efficiency

We have strengthened our senior leadership group, taking the opportunity to split our Group Delivery function between two new executive team members, Gwyn Pritchard and Michael Bunyan, who respectively head Construction and Project Services. We are seeing the benefits of the new structure, with both teams highly focused on driving improvements in their own areas, while ensuring strong co-ordination between them.

There are numerous examples of enhancements to our systems, processes and organisation in the year, including further improvements to our cost management and forecasting, supplier management and quality assurance. Importantly, we have developed a rigorous approach to meeting the new requirements of the Building Safety Act and its Gateway submissions, which we believe can offer us an advantage in the market.

Being a responsible business

Sustainability remains a high priority for us and we made further good progress with our strategy, which encompasses our people, the places we develop and our impact on the planet.

Our people are fundamental to our business and ensuring that they remain aligned and motivated is a key priority for me. I am extremely pleased that we have increased significantly our engagement levels and employee net promoter scores both year on year and over the last few years. This reflects our considerable effort to increase communication with colleagues about the strategy for the business, the progression of day to day operations, and their confidence that we will act on their feedback. In FY26 we are launching a new set of values, which authentically reflect who we are and the behaviours we want to reward, as well as increasing our focus on career paths, succession planning and training and development, to identify and bring through the talent we need.

We continue to reduce our environmental impact, including through the materials we choose and our growing use of Modern Methods of Construction, as well as diverting 99.74% of waste from landfill. As part of our commitment to the places we develop and the surrounding communities, we launched a Social Value Framework in the year. This builds on and formalises the wide range of work we already do, to maximise the benefits to each area.

Outlook

We believe our sectors remain among the best in UK real estate. The operational markets for BTR and PBSA remain fundamentally undersupplied, with limited new stock coming through. Residential for rent assets also remain highly attractive to investors and we are seeing signs that global fundraising is starting to pick up, with the UK likely to be a net beneficiary of allocations when they come through.

One of the business's great strengths is its agility, adaptability and resilience. The vertically integrated platform provides a huge range of skill sets across the whole real estate development cycle. This allows us to pivot and innovate in our transaction structures and markets we target.

Over the last 18 months we have created a more stable platform for the business, through tight financial management, innovation in transactional structures, diversification in the markets where we operate and alignment and motivation of our people.

Going into FY26, we have c.£340 million of forward sold revenue and a total pipeline of £2 billion of development opportunities. The short term outlook for the market remains uncertain but we are well placed to execute those opportunities when it does improve.

Alex Pease

Chief Executive Officer

16 December 2025

Operational review

Build To Rent

	BTR apartments by estimated year of practical completion
	Total pipeline	FY26	FY27	FY28	FY29	FY30 +
Forward sold	1,686	1,426	260	-	-	-
Forward sales in the market	695	70	-	-	625	-
Sites secured subject to planning	1,053	-	-	-	-	1,053
Total secured pipeline	3,434	1,496	260	-	625	1,053

Total revenues for the year were £180.0 million (FY24: £211.3 million), down 14.8%. Revenues were generated by the build‑out of our forward sold developments and the initial contribution from our development partnership for a 260-unit aparthotel in Southwark, which we agreed in January 2025. During the financial year, we reached practical completion on our 214-unit scheme in Leatherhead, the Sherlock Street development in Birmingham with nearly 600 homes, and the 316-apartment Signal Box Yard scheme in Bath. We have four further BTR schemes on site, in addition to the Southwark development partnership, which are on track for their respective completions.

We were pleased to receive planning consent for our first co-living project in Leeds, which will see us convert a vacant office block in the city centre into 230 homes. Three further sites have been secured in the year, subject to planning, which will offer c.1,100 further homes.

The table above shows the current secured development pipeline for BTR. This has an estimated future revenue value to us of £0.6 billion (FY24: £0.5 billion), of which £94 million is currently forward sold (FY24: £232 million).

Gross profit for the year was £16.0 million (FY24: £18.0 million), down 11.1%. The gross margin was 8.8% (FY24: 8.5%), with the projects completed in the year being delivered ahead of both programme and budget.

Student Accommodation

	PBSA beds by estimated year of practical completion
	Total pipeline	FY26	FY27	FY28	FY29	FY30+
Forward sold	1,869	397	204	1,268	-	-
Forward sales in the market	3,425	-	-	322	1,811	1,292
Sites secured subject to planning	-	-	-	-	-	-
Total secured pipeline	5,294	397	204	1,590	1,811	1,292

Revenue from PBSA was £67.7 million (FY24: £117.6 million), down 42.4%. Revenue included the sale of the Ard development in Glasgow to a new joint venture. Revenue in the prior year included the sale of the Gas Lane scheme in Bristol. Gross profit was £4.4 million (FY24: £13.6 million). Excluding the exceptional impairment of one right‑of‑use asset of £1.0 million, gross profit was £5.4 million, resulting in a gross margin of 8.0% (FY24: 11.6%) as a result of a higher mix of development management schemes compared to the prior year.

In FY25, we completed one scheme as planned, with our Bristol project reaching practical completion. We had a further three projects in build at the year end. In August 2025, we announced that we had signed a development partnership to deliver c.200 PBSA units in Bristol. We expect this to generate more than £28 million in revenue for us over the development period, with construction scheduled to complete ahead of the 2027/28 academic year.

Our Glasgow scheme with Maslow, also commenced on site during the year. This deal secures c.£115 million of revenue for the Group over three years.

We continued to replenish our development pipeline during FY25, obtaining planning on 2 sites with capacity for c.1,100 beds, including a 322-bed project in Bristol's Temple Quarter. The secured development pipeline for PBSA is shown in the table above. The pipeline has an estimated future revenue value to us of £0.8 billion (FY24: £0.8 billion), of which c.£200 million is currently forward sold (FY24: £60 million).

Refresh

Refresh had an encouraging year, generating total revenues of £10.0 million (FY24: £10.9 million), with gross profit of £1.5 million (FY24: £1.5 million) at an improved margin of 15.0% (FY24: 13.8%). The business completed five projects in the year, with two on site at the year end. We were pleased to secure our first repeat business for clients during FY25.

We have a significant potential pipeline, with c.£94 million of opportunities currently being tracked. There are strong prospects in PBSA, where much of the stock is outdated. Transactions are an important catalyst for refurbishment works and much of the PBSA transaction volume in 2025 has been on stock older than five years.

Investors recognise our ability to reposition assets for them, potentially increasing revenues and capital values, and repurposing of stock is emerging as a key target for capital. In addition to PBSA, we are engaging with new markets such as hospitality.

Single Family Homes

This business is a natural complement to our BTR developments, with its focus on developing single family homes for rent across a range of tenures, typically including a substantial affordable homes element.

Revenue in the year benefited from the start of the development partnership we announced in December 2024, to develop and deliver 295 homes for Torus, the largest affordable housing provider in North West England. The transaction is expected to generate revenue of around £48 million for us over approximately 40 months and has the potential to create further value for us in the future.

In addition, the business completed its affordable element of our development in Crewe, along with five private sales in the year (FY24: 20 sales), with the reduction reflecting the successful completion of our Preston development in FY24.

Revenue for the year was £13.7 million (FY24: £12.9 million) with £0.8 million gross loss (FY24: £0.2 million loss).

Accommodation Management

Student beds and BTR apartments under management:

FY25: 21,019

FY24: 18,656

Student net promoter score:

FY25: +35

FY24: +36

Revenues in Fresh increased by 3% to £8.4 million (FY24: £8.1 million), reflecting an increase in student bed numbers, acquired through in-year takeovers. The business secured 3,781 beds across 13 schemes during the year, which was a strong performance. Notably, this included a 1,347-bed portfolio in the Republic of Ireland, which strengthens our position in this market. This growth was partially offset by the loss of 1,404 beds across five schemes, with four of these schemes being sold, resulting in the service transferring in‑house or to other providers. In addition to the student schemes won in the year, Fresh secured a co-living scheme which is due to mobilise in 2026. In total, at the end of FY25 Fresh had 21,019 units under management across 66 schemes (FY24: 18,656 units across 58 schemes).

We have a track record of excellent service and we maintained our student net promoter score in the Global Student Living Index (GSLI) with a score of +35 (FY24: +36), well above the benchmark of +20 for other large private operators. We saw improved scores for participating schemes, with ten properties obtaining a Platinum rating (FY24: seven), 20 achieving Gold (FY24: 16) and 14 attaining Silver (FY24: 13). More than 3,700 of our residents took part in the survey. During the year, Fresh was nominated for several awards and was the winner of the 'Best Individual Property' award for The Waterways scheme at the Global Student Living Awards.

We continued to develop our client reporting portal during the year and launched it in December 2025. It will enable clients to access data on their assets' financial, operational and ESG performance in near real time, assisting their onward reporting. We also upgraded our Yardi property management platform, to provide more functionality and refresh the property listings on our websites. The business is adopting AI tools to improve efficiency and the customer experience, for example to transform marketing content into social media formats. We have a roadmap for other AI tools we intend to introduce through 2026.

Financial review

Successful sale of our Glasgow scheme, cost control and broadening our offering contribute to solid performance in FY25.

	Adjusted results1		Statutory results
	FY25	FY24	FY25	FY24
	£m	£m	£m	£m
Revenue	279.8	362.4	279.8	362.4
Gross profit	26.5	33.8	19.4	33.8
Operating profit/(loss)	6.3	10.6	(5.8)	3.6
Profit/(loss) before tax	5.6	9.2	(8.7)	(0.3)

1)    A reconciliation between adjusted and statutory results is shown below reflecting the impact of exceptional items in the year.

Revenue

Group revenue for the year was £279.8 million (FY24: £362.4 million), down 22.8%. Revenue was primarily generated by our in-build developments, with the reduction from previous years reflecting fewer transactions and schemes in progress given the challenging market backdrop, as well as the accounting treatment of the transaction of our Glasgow development, which was executed as a disposal of subsidiary, rather than traditional land sale. Revenue did, however, benefit from a number of development management opportunities secured in year which, whilst not contributing a significant day-one value akin to a land sale, enhance the Group's strong secured pipeline.

On a segmental basis, revenue in the year was as follows:

	FY25	FY24
	£m	£m
Build To Rent	180.0	211.3
Student Accommodation	67.7	117.6
Affordable-led Homes	13.7	12.9
Accommodation Management	8.3	8.1
Refresh	10.0	10.9
Corporate	0.1	1.6
Group revenue	279.8	362.4

Information on divisional revenue performance can be found in the operational review above.

Gross profit

Gross profit for the year was £19.4 million (FY24: £33.8 million), a decrease of 42.6%, impacted by exceptional impairments to land (£6.1 million within the Corporate segment) and right-of-use assets (£1.0 million within the Student Accommodation segment), and the impact of reduced revenues. Excluding these exceptional impairments, gross profit was £26.5 million (FY24: £33.8 million) and gross margins remained broadly flat at 9.5% (FY24: 9.3%).

On a segmental basis, gross profit in the year was as follows

	FY25	FY24
	£m	£m
Build To Rent	16.0	18.0
Student Accommodation	4.4	13.6
Affordable-led Homes	(0.8)	(0.2)
Accommodation Management	4.6	4.4
Refresh	1.5	1.5
Corporate	(6.3)	(3.5)
Gross profit	19.4	33.8

See the operational review above for more information on divisional gross profits. Corporate is primarily central costs such as plant, insurance and legal expenses that are not allocated to a business unit.

Operating profit

Operating loss for the year was £5.8 million (FY24: profit of £3.6 million). After adding back the £7.1 million of exceptional impairments within gross margin noted above and the £5.0 million increase to the building safety provision described below, adjusted operating profit for the year was £6.3 million (FY24: £10.6 million), benefiting from the £8.2 million profit on divestment of the Glasgow PBSA scheme.

Administration expenses, excluding the impact of exceptional items, reduced to £28.3 million (FY24: £29.5 million), demonstrating a focus on cost control in the face of continued inflation in services costs and wages.

Finance costs

Finance costs for the year were £4.3 million (FY24: £4.9 million). These costs included:

·    the finance cost of capitalised leases under IFRS 16, which totalled £1.5 million (FY24: £1.7 million);

·    an exceptional charge of £2.2 million (FY24: £2.5 million) for the unwind of the discount of the building safety provision (see below); and

·    fees associated with the availability of our revolving credit facility (RCF).

Loss before tax

Loss before tax for the year was £8.7 million (FY24: loss before tax of £0.3 million). Adjusted profit before tax, which excludes the impact of the exceptional items, was £5.6 million (FY24: £9.2 million).

Taxation

The corporation tax credit was £0.3 million (FY24: credit of £2.2 million). The effective tax credit rate was less than the standard UK corporation tax rate of 25% for the year, primarily as a result of the derecognition of certain deferred tax assets, offset by tax reliefs utilised on disposal of a subsidiary. Cash tax in respect of FY25 was minimal, as a result of utilising brought forward tax losses.

Information on our tax strategy can be found in the Investor section of our website, watkinjonesplc.com.

Earnings per share

Basic loss per share from continuing operations for the year was 3.3 pence (FY24: 0.7 pence earnings per share). Adjusted basic earnings per share, which excludes the impact of exceptional items, was 2.3 pence (FY24: 3.5 pence).

Dividends

The Board has continued to prioritise the Group's financial flexibility during the current period of market disruption and has therefore not declared any dividends in respect of FY25. The Board will keep this under review.

At 30 September 2025, the Company had distributable reserves of £42.3 million available to pay dividends.

EBITDA

EBITDA was £8.5 million (FY23: £11.2 million). Adjusted EBITDA, which excludes the impact of the building safety provision charge, was £13.5 million (FY24: £18.2 million), with an adjusted EBITDA margin of 4.8% (FY24: 5.0%).

Return on capital employed

The return on capital employed (ROCE) for the year reduced to 11.6% (FY24: 14.8%) as a result of the reduced profit in the year.

Impairments

The Group recorded an impairment charge of £6.1 million in relation to one land asset which has experienced adverse market conditions specific to that location and circumstances.

It also recorded a £1.0 million impairment charge against its Europa leasehold asset as a result of reduced occupancy in the 2025/26 academic year.

Building safety

We continue to focus on delivering our building safety rectification obligations and completed works on a further six buildings in FY25, with a cash outflow of £8.8 million in line with our expectations.

Following the conclusion of investigations undertaken, necessary remedial works were identified at further properties, and the scope of works at a number of properties already under remediation has been revised. An additional net provision of £5.0 million (30 September 2024: £7.0 million) has therefore been made during the year, for which further information is provided in the notes to the financial statements.

As for many other participants in our industry, the properties in scope of the government's guidance and legislation continue to evolve, as do the range and cost of works. We are monitoring this as building investigations and discussions with building owners continue. The provision recognised represents our best estimate of the amounts required to remediate those properties where we expect remediation works to be required. However, as disclosed in the notes to the financial statements, there are a number of properties for which the Group's liability remains uncertain and, as such, we consider these to be contingent liabilities until such time as there is greater clarity on the Group's obligations or the extent, if any, of remedial works required.

As shown in the table below, at the year end our net provision reduced to £46.4 million (FY24: £48.0 million), after offsetting a £10.3 million reimbursement asset (FY24: £7.6 million) representing agreed customer contributions to the remediation works.

Our current expectation is for a cash outflow of c.£20 million in FY26 with the balance between FY27 and FY29. Given these costs will be incurred in future years, the provision is discounted to its present value. As the discount unwinds over time, the change in the present value is recognised as an exceptional finance cost, as described above.

Building safety provision and reimbursement asset                                  

	Provision	Asset	Total
	£m	£m	£m
At 1 October 2024	55.6	(7.6)	48.0
Arising during the year	8.7	(3.7)	5.0
Utilised in the year	(10.2)	1.4	(8.8)
Unwind of discount rate	2.6	(0.4)	2.2
At 30 September 2025	56.7	(10.3)	46.4

Statement of financial position

At 30 September 2025, non-current assets amounted to £69.6 million (FY24: £69.0 million), with the most significant item being the carrying value of the leased student accommodation investment properties amounting to £15.7 million (FY24: £20.8 million), which has reduced with depreciation and an exceptional impairment charge of £1.0 million taken against the Europa asset as a result of reduced occupancy in the 2025/26 academic year.

The deferred tax asset, predominantly relating to carried forward tax losses from the years ended 30 September 2023 and 2024, amounted to £15.1 million (FY24: £15.1 million) and is expected to be fully utilised in the short to medium term.

Right‑of‑use assets relating to office and car leases amounted to £4.6 million (FY24: £5.7 million). Intangible assets relating to Fresh amounted to £10.5 million (FY24: £11.0 million) and were reduced by the amortisation charge of £0.5 million in the year.

The movement in the building safety provision and associated reimbursement assets is described above.

Inventory and work in progress was £86.9 million (FY24: £94.3 million), with the decrease reflecting the exceptional land asset impairment of £6.1 million (see note 4) and the forward sale during the year of our Glasgow PBSA development, offset by continued investment in our pipeline.

Contract assets decreased in the year to £29.1 million (FY24: £36.5 million) reflecting the final payment balances which are received on completion of developments during the year, particularly from a number of BTR and PBSA developments which were close to completion at the prior year end. Contract liabilities increased by £0.7 million during the year to £4.0 million, reflecting timing of invoicing.

Interest-bearing loans and borrowings reduced to £9.9 million at 30 September 2025 (FY24: £13.6 million) reflecting the repayment of borrowings in respect of our Glasgow development.

Lease liabilities were reduced to £33.7 million (FY24: £40.8 million), reflecting capital repayments made in the year offset by indexed rent increases on our student leased investment properties.

At the year end, we had a cash balance of £80.4 million and loans of £9.9 million, resulting in an adjusted net cash position (excluding lease liabilities) of £70.5 million. At 30 September 2024, we had a cash balance of £97.0 million and loans of £13.6 million, resulting in an adjusted net cash position of £83.4 million. Including the impact of lease liabilities, net cash was £36.8 million (FY24: £42.6 million).

Cash flow

In a typical year, the Group's cash balance peaks around the year end, as we receive the final payments on student accommodation developments completing ahead of the new academic year, as well as initial proceeds from the latest forward sales.

The Group is then a net user of cash until the following year end, as a result of outflows such as tax and dividend payments (when paid), overhead costs and land purchases.

However, as in the prior year, we expect our cash flow profile in FY26 will be more evenly spread than in previous years. This reflects the anticipated physical completions of some of our BTR developments in FY26, which will result in the Group receiving these final payments throughout the year.

The cash balance at the year end is still important for funding our day‑to‑day cash requirements and for putting the Group in a strong position when bidding for new sites.

The Group's net cash outflow from operating activities for the year was £14.1 million (FY24: inflow of £30.2 million), as a result of continued investment in our pipeline and timing of receipts, with £10.3 million of income from the forward sale of our Glasgow development being collected just after year end. Proceeds from the sale of our Glasgow subsidiary are included in investing rather than operating cashflows.

Net finance costs paid totalled £1.0 million (FY24: £1.2 million), including the finance charges on the capitalised lease liabilities of £1.5 million (FY24: £1.7 million). No dividends were paid in the year (FY24: £nil).

Exceptional costs

		Year ended 30 September 2025 £'000	Year ended 30 September 2024 £'000
Recognised in cost of sales
Impairment of land asset		6,100	-
Impairment of right-of-use asset		1,010	-
Total exceptional items recognised in cost of sales		7,110	-
Recognised in administrative expenses
Building Safety provision		5,000	7,001
Total exceptional items recognised in administrative expenses		5,000	7,001
Recognised in finance costs
Unwind of discount rate on Building Safety provision		2,181	2,517
Total exceptional items recognised in finance costs		2,181	2,517
Total exceptional costs		14,291	9,518

Cash and net debt

	FY25	FY24
	£m	£m
Operating profit before exceptional items	6.3	10.6
Loss on disposal of fixed assets	-	0.1
Depreciation and amortisation	7.2	6.9
Profit on disposal of subsidiary	(8.2)	(6.3)
(Increase)/decrease in working capital	(18.3)	16.2
Finance costs paid	(1.0)	(1.2)
Tax (paid)/received	(0.1)	3.9
Net cash flow from operating activities	(14.1)	30.2
Purchase of fixed assets	(0.1)	(0.1)
Cash flow from joint venture interests including Stratford disposal	8.9	16.9
Payment of lease liabilities	(7.9)	(7.3)
Repayment of borrowings	(3.4)	(15.1)
(Decrease)/increase in cash	(16.6)	24.6
Cash at beginning of year	97.0	72.4
Cash at end of year	80.4	97.0
Less: borrowings	(9.9)	(13.6)
Net cash before deducting lease liabilities	70.5	83.4
Less: lease liabilities	(33.7)	(40.8)
Net cash	36.8	42.6

Total cash and available facilities                     

	FY25	FY24
	£m	£m
Cash and cash equivalents	80.4	97.0
Revolving credit facility (RCF)	50.0	50.0
Drawn balance on RCF	(10.4)	(13.8)
£10 million accordion facility	10.0	-
Overdraft	-	10.0
Total cash and available facilities	130.0	143.2

Bank facilities

The Group holds an RCF with HSBC, which was amended and extended during the year, to a value of £50.0 million with an additional £10.0 million accordion which we can use to fund land acquisitions and development work. The RCF had £10.4 million drawn against it at the year end (30 September 2024: £13.8 million), and runs to 15 November 2027.

Total cash and available facilities at 30 September 2025 therefore stood at £130.0 million (30 September 2024: £143.2 million).

Going concern

We have undertaken a thorough review of the Group's ability to continue to trade as a going concern for the period to 31 January 2027. The basis of the review and an analysis of the downside risks is set out in the notes to the financial statements.

Alternative performance measures (APMs)

We use APMs as part of our financial reporting, alongside statutory reporting measures. These APMs are provided for the following reasons:

1.   to present users of the annual report with a clear view of what we consider to be the results of our underlying operations, enabling consistent comparisons over time and making it easier for users of the report to identify trends;

2.   to provide additional information to users of the annual report about our financial performance or position;

3.   to show the performance measures used by the Board in determining dividend payments; and

4.   to show the performance measures that are linked to remuneration for the Executive Directors.

The following APMs appear in this annual report

		Reconciliation
			FY25	FY24
	Reason for use		£'000	£'000
Adjusted operating (loss)/profit	1	Operating (loss)/profit	(5,761)	3,566
		Add: exceptional items in operating (loss)/profit	12,110	7,001
		Adjusted operating profit	6,349	10,567
Adjusted profit/(loss) before tax	1,4	Loss before tax	(8,680)	(307)
		Add: exceptional items	14,291	9,518
		Adjusted profit before tax	5,611	9,211
Adjusted basic earnings/(losses) per share	1,3,4	(Loss)/profit after tax	(8,406)	1,895
		Add: exceptional items	14,291	9,518
		Less: tax on exceptional items	-	(2,380)
		Adjusted profit/(loss) after tax	5,885	9,033
		Weighted average number of shares	256,564,829	256,564,829
		Adjusted basic earnings/(losses) per share	2.3 pence	3.5 pence
EBITDA	1	Operating (loss)/profit	(5,761)	3,566
		Add: share of loss in joint ventures	-	(8)
		Add: impairment of pipeline assets	276	769
		Add: exceptional impairment of land assets	6,100	-
		Add: exceptional impairment of right-of-use assets	1,010	-
		Add: depreciation	6,346	6,346
		Add: amortisation	559	559
		EBITDA	8,530	11,232
Adjusted EBITDA	1	EBITDA	8,530	11,232
		Add: exceptional items in administrative expenses	5,000	7,001
		Adjusted EBITDA	13,530	18,233
Adjusted net cash	2	Net cash	36,834	42,602
		Add: lease liabilities	33,631	40,769
		Adjusted net cash	70,465	83,371
Return on capital employed	1,2	Adjusted operating profit	6,349	10,567
		Net assets at 30 September	124,994	132,590
		Less: adjusted net cash	(70,465)	(83,371)
		Less: intangible assets	(10,487)	(11,047)
		Less: investment property (leased)	(15,681)	(20,751)
		Less: right-of-use assets	(4,585)	(5,747)
		Add: lease liabilities	33,631	40,769
		Adjusted net assets at 30 September	57,407	52,443
		Adjusted net assets at 1 October	52,443	90,177
		Average adjusted net assets	54,925	71,310
		Return on capital employed	11.6%	14.8%

Simon Jones

Chief Financial Officer

16 December 2025

Consolidated statement of comprehensive income

for the year ended 30 September 2025

		Year ended 30 September 2025			Year ended 30 September 2024
		Before			Before
		exceptional	Exceptional		exceptional	Exceptional
		items	items	Total	items	items	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Continuing operations
Revenue	5	279,837	-	279,837	362,371	-	362,371
Cost of sales		(253,345)	(7,110)	(260,455)	(328,565)	-	(328,565)
Gross profit		26,492	(7,110)	19,382	33,806	-	33,806
Administrative expenses	6	(28,306)	(5,000)	(33,306)	(29,499)	(7,001)	(36,500)
Profit on disposal of subsidiary		8,163	-	8,163	6,260	-	6,260
Operating profit/(loss)		6,349	(12,110)	(5,761)	10,567	(7,001)	3,566
Share of loss in joint ventures		-	-	-	(8)	-	(8)
Finance income		1,359	-	1,359	1,008	-	1,008
Finance costs		(2,097)	(2,181)	(4,278)	(2,356)	(2,517)	(4,873)
Profit/(loss) before tax		5,611	(14,291)	(8,680)	9,211	(9,518)	(307)
Income tax credit/(expense)		274	-	274	(178)	2,380	2,202
Profit/(loss) for the year attributable to ordinary equity holders of the parent		5,885	(14,291)	(8,406)	9,033	(7,138)	1,895
Other comprehensive income
That will not be reclassified to profit or loss in subsequent periods:
Net profit/(loss) on equity instruments designated at fair value through other comprehensive income, net of tax		27	-	27	(236)	-	(236)
Total comprehensive income/(loss) for the year attributable to ordinary equity holders of the parent		5,912	(14,291)	(8,379)	8,797	(7,138)	1,659
		Pence	Pence	Pence	Pence	Pence	Pence
Earnings per share for the year attributable to ordinary equity holders of the parent
Basic earnings/(loss) per share	9	2.293	(5.568)	(3.275)	3.521	(2.782)	0.739
Diluted earnings/(loss) per share	9	2.288	(5.563)	(3.275)	3.497	(2.763)	0.734

Consolidated statement of financial position

as at 30 September 2025

		30 September	30 September
		2025	2024
	Notes	£'000	£'000
Non-current assets
Intangible assets		10,487	11,047
Investment property (leased)		15,681	20,751
Other right-of-use assets		4,585	5,747
Property, plant and equipment		828	1,401
Investment in joint ventures		14,515	7,952
Reimbursement assets	11	7,710	6,147
Deferred tax assets		15,090	15,090
Other financial assets		679	866
		69,575	69,001
Current assets
Inventory and work in progress		86,851	94,266
Contract assets		29,123	36,538
Trade and other receivables		41,015	31,191
Reimbursement assets	11	2,565	1,470
Current tax receivable		2,911	2,461
Cash and cash equivalents		80,398	96,962
		242,863	262,888
Total assets		312,438	331,889
Current liabilities
Trade and other payables		(83,169)	(86,054)
Contract liabilities		(4,005)	(3,252)
Lease liabilities		(8,223)	(7,750)
Provisions	11	(22,286)	(12,090)
		(117,683)	(109,146)
Non-current liabilities
Interest-bearing loans and borrowings		(9,933)	(13,591)
Lease liabilities		(25,408)	(33,019)
Provisions	11	(34,420)	(43,543)
		(69,761)	(90,153)
Total liabilities		(187,444)	(199,299)
Net assets		124,994	132,590
Equity
Share capital		2,567	2,567
Share premium		84,612	84,612
Merger reserve		(75,383)	(75,383)
Fair value reserve of financial assets at FVOCI		189	162
Share‑based payment reserve		1,808	1,780
Retained earnings		111,201	118,852
Total equity		124,994	132,590

Consolidated statement of changes in equity

for the year ended 30 September 2025

				Fair value
				reserve of
				financial	Share-based
	Share	Share	Merger	assets	payment	Retained
	capital	premium	reserve	at FVOCI	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 September 2023	2,564	84,612	(75,383)	425	1,407	116,380	130,005
Profit for the year	-	-	-	-	-	1,895	1,895
Other comprehensive income	-	-	-	(263)	-	27	(236)
Total comprehensive income	-	-	-	(263)	-	1,922	1,659
Share-based payments	-	-	-	-	901	-	901
Recycled reserve for fully vested share-based payment schemes	-	-	-	-	(528)	528	-
Issue of new share capital	3	-	-	-	-	-	3
Deferred tax debited directly to equity	-	-	-	-	-	22	22
Dividend paid	-	-	-	-	-	-	-
Balance at 30 September 2024	2,567	84,612	(75,383)	162	1,780	118,852	132,590
Loss for the year	-	-	-	-	-	(8,406)	(8,406)
Other comprehensive income	-	-	-	27	-	-	27
Total comprehensive income	-	-	-	27	-	(8,406)	(8,379)
Share-based payments	-	-	-	-	642	-	642
Recycled reserve for fully vested share-based payment schemes	-	-	-	-	(614)	614	-
Issue of new share capital	-	-	-	-	-	-	-
Deferred tax credited directly to equity	-	-	-	-	-	141	141
Dividend paid	-	-	-	-	-	-	-
Balance at 30 September 2025	2,567	84,612	(75,383)	189	1,808	111,201	124,994

Consolidated statement of cash flows

for the year ended 30 September 2025

		Year ended	Year ended
		30 September	30 September
		2025	2024
	Notes	£'000	£'000
Cash flows from operating activities
Cash (outflow)/inflow from operations	12	(13,101)	27,521
Interest received		1,359	1,008
Interest paid		(2,314)	(2,177)
Tax (paid)/received		(61)	3,872
Net cash (outflow)/inflow from operating activities		(14,117)	30,224
Cash flows from investing activities
Acquisition of property, plant and equipment		(129)	(120)
Proceeds on disposal of property, plant and equipment		-	12
Proceeds on disposal of subsidiary		9,122	6,260
Repayment of related party loan following disposal of subsidiary		6,558	18,540
Investments in joint venture interests		(6,750)	(7,951)
Net cash inflow from investing activities		8,801	16,741
Cash flows from financing activities
Payment of principal portion of lease liabilities		(7,807)	(7,370)
Drawdown of RCF		-	-
Repayment of bank loans and RCF		(3,441)	(15,064)
Net cash outflow from financing activities		(11,248)	(22,434)
Net (decrease)/increase in cash		(16,564)	24,531
Cash and cash equivalents at 1 October 2024 and 1 October 2023		96,962	72,431
Cash and cash equivalents at 30 September 2025 and 30 September 2024		80,398	96,962

NOTES TO THE Consolidated FINANCIAL statements

for the year ended 30 September 2025

1. General information

Watkin Jones plc (the 'Company') is a public limited company incorporated in the United Kingdom under the Companies Act 2006 (registration number 9791105) and its shares are listed on the Alternative Investment Market of the London Stock Exchange. The Company is domiciled in the United Kingdom and its registered address is 12 Soho Square, London, United Kingdom, W1D 3QF.

The principal activities of the Company and its subsidiaries (collectively the 'Group') are those of property development and the management of properties for multiple residential occupation.

The consolidated financial statements for the Group for the year ended 30 September 2025 comprise the Company and its subsidiaries. The basis of preparation of the consolidated financial statements is set out in note 2 below.

2. Basis of preparation

The financial statements of the Group have been prepared and approved by the Directors in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 and in accordance with United Kingdom adopted International Accounting Standards.

The preparation of financial information in conformity with International Financial Reporting Standards (IFRS) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events may ultimately differ from those estimates.

The financial information set out above does not constitute the Group's statutory accounts for the years ended 30 September 2025 or 2024, but is derived from those accounts. Statutory accounts for 2024 have been delivered to the Registrar of Companies, and those for 2025 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

The accounting policies set out in the notes have, unless otherwise stated, been applied consistently to all periods presented in these financial statements. The financial statements are prepared on the historical cost basis except as disclosed in these accounting policies.

The financial statements are presented in pounds sterling and all values are rounded to the nearest thousand (£'000), except when otherwise indicated.

2.1 Going concern

The Directors have undertaken a thorough review of the Group's ability to continue to trade as a going concern for the period to 31 January 2027 (the 'forecast period'). This review has been undertaken taking into consideration the following matters.

Liquidity

At 30 September 2025, the Group had a robust liquidity position, with cash and available headroom in its banking facilities totalling £130.1 million, as set out below.

	£m
Cash balances	80.4
RCF headroom	39.7
Accordion facility	10.0
Total cash and available facilities	130.1

Strong liquidity has been maintained through the first quarter of the year ending 30 September 2026, providing the Group with a good level of cash and available banking facilities for the year ahead.

All financial covenants under this facility were met at 30 September 2025 and are forecast to be met throughout the period to 31 January 2027.

Business model

Our business model is capital light. By forward selling or acting as development partners for the majority of our build to rent, purpose built student accommodation and Refresh developments, we receive payment before we incur any significant development cash outflows.

By controlling our pipeline we are able to ensure that we only commit expenditure to projects that are either development partnerships, are forward sold or on which we are undertaking a modest level of enabling works.

In certain circumstances we may decide to continue construction activities beyond the initial enabling phase, without a forward sale agreement in place, but we take this decision based on our available liquidity and can suspend the works should it prove necessary. This greatly limits our exposure to development expenditure which is not covered by cash income.

Sites are normally secured on a subject to satisfactory planning basis, which gives us time to manage the cash requirements and to market them. We also take a cautious approach to managing our land acquisition programme to ensure that we have sufficient liquidity available to complete the acquisition of the sites without any new forward sales being secured.

The Fresh business receives a regular contractual monthly fee income from its multiple clients and the short to medium‑term risk to its revenue stream is low.

Our Refresh business involves little initial investment or rolling working capital, with works completed generally certified and invoiced on a monthly basis.

For our Affordable Homes business, which is currently relatively small and only has a few sites in build, we manage our development expenditure so that, other than for infrastructure works, we only commit expenditure where it is supported by a forward sales position.

We also receive rental income from tenants on our leased PBSA assets.

Our business model and approach to cash management therefore provides a high degree of resilience.

Counterparty risk

The Group's clients are predominantly blue-chip institutional funds, and the risk of default is low. The funds for a forward sold development are normally specifically allocated by the client or backed by committed debt funding.

For forward sold developments, our cash income remains ahead of our development expenditure through the life of the development, such that if we were exposed to a client payment default, we could suspend the works, thereby limiting any cash exposure.

Fresh has many clients and these are mostly institutional funds with low default risk.

Base case cash forecast

We have prepared a base case cash forecast for the forecast period, based on our current business plan and trading assumptions for the year. This is well supported by our forward sold pipeline of three PBSA developments and four BTR developments for delivery during the period FY26 to FY28, as well as the reserved/exchanged and forward sales for our Affordable Homes business and the contracted income for Fresh and Refresh. Our current secured cash flow, derived from our forward sold developments and other contracted income, net of overheads and tax, results in a modest cash utilisation over the forecast period, with the result that our liquidity position is maintained.

As part of this, the Board has also assessed the appropriateness of the phasing of payments for building safety remediation from the building safety provision together with the overall level of the provision as noted in note 11.

In addition to the secured cash flow, the base case forecast assumes a number of new transactions securing future revenues and further house sales which, if achieved, will result in a further strengthening of our liquidity position.

Risk analysis

In addition to the base case forecast, we have considered the possibility of continued disruption to the market given the market turbulence seen in the UK over recent years. This is our most significant risk as it would greatly limit our ability to achieve any further disposals.

We have run a reasonable downside model scenario, such that forward sales and new site acquisitions are delayed by up to six months, to assess the possible impact of the above risks. Whilst there remains a more medium-term risk regarding the likelihood that existing challenges in the macro-environment will continue, together with the uncertainties of the BSA legislation, the level of estimated cash spend required in the coming year, and the possibility of further liabilities materialising, the cash forecast prepared under this scenario illustrates that adequate liquidity is maintained through the forecast period and the financial covenants under the RCF would still be met.

The minimum total cash and available facilities balance under this scenario was £93.6 million (£103.6 million including our accordion facility).

We consider the likelihood of events occurring which would exhaust the total cash and available facilities balances remaining to be remote. However, should such events occur, management would be able to implement reductions in discretionary expenditure and consider the sale of the Group's land sites currently held on balance sheet at a reduced priced if necessary to enable a quick sale, to ensure that the Group's liquidity was maintained.

Conclusion

Based on the thorough review and robust downside forecasting undertaken, and having not identified any material uncertainties that may cast any significant doubt, the Board is satisfied that the Group will be able to continue to trade for the period to 31 January 2027 and has therefore adopted the going concern basis in preparing the financial statements.

3. Accounting policies

The results for the year have been prepared on a basis consistent with the accounting policies set out in the Watkin Jones plc Annual Report for the year ended 30 September 2025.

4. Building safety provision

The Group holds a provision for building safety remedial works which requires a number of significant judgements and estimates to be made by management, for which the legislative background was disclosed in the Group's annual report and financial statements for the year ended 30 September 2024.

The Group is a member of the Responsible Actors Scheme (RAS) in England. By signing up to the RAS, the Group is required to sign the Developers' Remediation Contract (the 'Contract') which requires us to:

·    take responsibility for all necessary work to address life-critical fire safety defects arising from the design and construction of buildings 11 metres and over in height that we developed or refurbished in England over the 30 years ending on 4 April 2022;

·    keep residents in those buildings informed about progress towards meeting this commitment; and

·    reimburse taxpayers for funding spent on remediating their buildings, i.e. where leaseholders have accessed the Building Safety Fund to remediate their properties.

Under the obligations of the scheme we have written to building owners to understand their position regarding those buildings.

The Contract is intended to cover leasehold buildings rather than PBSA or BTR, and therefore the significant majority of buildings that the Group has developed over the last 30 years are outside the scope of the Contract. There are 13 leasehold buildings falling within the scope of the RAS, and five of these are included within the provision, with no further leasehold buildings being added during the year ended 30 September 2025.

In 2023, the Welsh Government announced a new agreement with developers to tackle fire safety defects in medium high‑rise residential buildings, known as the Developers' Pact, which the Group signed during the year ended 30 September 2024. The Group has been approached in respect of one property which we have provided for on the basis that remedial works are required. In our view, based on the investigative procedures that we have carried out, there are no further remedial works required to any other Welsh properties.

The Housing (Cladding Remediation) (Scotland) Act was passed in June 2024 and contained provision for the Responsible Developers Scheme, a remediation agreement for which the specific details are still to be agreed with developers. It is the Group's expectation that the basis for this scheme will be consistent with the RAS, such that it is intended to cover leasehold buildings. The Group has constructed one leasehold property in Scotland, which remains under contract. In our view, based on the investigative procedures that we have carried out, there is no remedial work required on that property.

Based on our internal review procedures described above, the provision includes an estimation of works required in relation to buildings identified as requiring remediation.

Provisions are recognised when three criteria are met: 1) the Group has a present obligation as a result of a past event; 2) it is probable that an outflow of resources will be required to settle the obligation; and 3) a reliable estimate can be made of the obligation.

This is a highly complex area with significant estimates in respect of the cost of remedial works, the quantum of any legal expenditure associated with the defence of the Group's position in this regard, and the extent of those properties within the scope of the applicable government guidance and legislation, which continue to evolve. For those properties not covered by the RAS, the Group is under no obligation to contact property owners.

In addition, the legislation underpinning the determination of liability for remediation of fire safety issues is complex, with case law evolving. All our buildings were signed off by approved inspectors as compliant with the relevant Building Regulations at the time of completion.

The amount provided for these works has been estimated by reference to recent industry experience and external quotes for similar work identified. The investigation of the works required at certain of these buildings is at an early stage and therefore it is possible that these estimates may change over time or if government legislation and regulation further evolves. If further buildings are identified this could also increase the required provision, but the potential quantity of this change cannot be readily determined in the absence of such identification through further claims or investigative work.

As a number of other housebuilders and developers have done, the provision includes an amount for contingency to reflect further buildings being identified as requiring remediation, or for unforeseen remediation costs beyond management's current knowledge. We have implemented a consistent contingency policy across properties where work is yet to start.

During the year ended 30 September 2025, the Group continued to work closely with residents and building owners within our legacy portfolio. Works were completed at six properties, all of which were included in the prior year's provision.

Following the conclusion of certain investigations undertaken, necessary remedial works were identified at further properties and appropriate costs provided.

As remediation of the remaining properties in the Group's programme continues, the scope of works at a number of these properties has been revised. Whilst for certain properties the required level of remediation has reduced from original estimates, at others the anticipated scope and cost for remediation has increased. In addition, the Group has continued to incur legal costs, both in respect of ongoing discussions with property owners and recoveries from the Group's supply chain.

An additional net provision of £5.0 million (30 September 2024: £7.0 million) for remedial works has therefore been made during the year, whilst broadly maintaining the level of contingency held from the prior year to reflect the continued levels of uncertainty of extent of remediation required. The provision, net of expected reimbursements, at 30 September 2025 was therefore £46.4 million (30 September 2024: £48.0 million).

We expect this cost to be incurred over the next four years, and the provision has been discounted to its present value accordingly. The timing of this expenditure will be dependent on the timely engagement by building owners, revisions to programme under the new BSA Gateways, and the availability of appropriately qualified subcontractors.

We continue to make progress with negotiating contributions from clients to mitigate our liability in relation to these remedial works and received £1.4 million of such contributions during the year. At the balance sheet date the Group has recognised reimbursement assets remaining of £10.3 million (30 September 2024: £7.6 million). These are expected to be recovered over the next four years.

At 30 September 2025, the Group remained in discussions with a number of property owners for 13 properties whereby the legal responsibility or confirmation of fire safety remediation requirements remains uncertain and which therefore form part of the Group's contingent liabilities. As referred to above, the clarification of whether these liabilities crystallise is dependent on multiple factors which are expected to be concluded in the next 12 to 24 months.

At the same time, the Group continues to explore opportunities to recover the costs of remediation through the Group's insurance providers and supply chain. However, no benefit has been assumed within the provision unless contractual terms have been established.

Of the outstanding net provision, £6.0 million is fixed as a result of legal settlements agreed with building owners. However, for the remaining liabilities, should the costs associated with the remedial works increase by 10%, the provision required would increase by £3.5 million. Should the discount rate applied to the calculation reduce by 1%, the provision required would increase by £0.7 million. Further details of the provision are set out in note 11.

Remedial works required on any additional property identified will range in cost. Whilst liabilities could be higher than recent experience, in the last two years, following detailed diligence with respect to scope of works, the range of liabilities has been between a net cost of £nil and c.£2 million, and the average net cost has been £0.9 million for properties requiring remediation.

The Group will continue to keep abreast of any changes to legislation and guidance, recognising that the approach to building safety continues to evolve.

5. Segmental reporting

Accounting policy

Operating segments are identified in a manner consistent with the internal reporting provided to the chief operating decision‑maker. The Group determines its reportable segments having regard to permitted aggregation criteria with the principal condition being that the operating segments should have similar economic characteristics. For the purposes of determining its operating segments, the chief operating decision‑maker has been identified as the Executive Committee. This committee approves investment decisions, allocates the Group's resources and reviews the internal reporting in order to assess performance.

The Group has identified six segments for which it reports under IFRS 8 'Operating Segments'. The following represents the segments that the Group operated in during FY25 and FY24:

a.   Student Accommodation - the development of purpose built student accommodation;

b.   Build To Rent - the development of build to rent accommodation;

c.   Affordable Homes - the development of residential housing;

d.   Refresh - the refurbishment, redevelopment and repurposing of existing accommodation;

e.   Accommodation Management - the management of student accommodation and build to rent/private rental sector (PRS) property; and

f.    Corporate - revenue from the development of commercial property forming part of mixed‑use schemes and other revenue and costs not solely attributable to any one other operating segment.

All revenues arise in the UK.

Performance is measured by the Board based on gross profit as reported in the management accounts.

Apart from inventory and work in progress, no other assets or liabilities are analysed into the operating segments.

	Student		Affordable		Accommodation
	Accommodation	Build To Rent	Homes	Refresh	Management	Corporate	Total
Year ended 30 September 2025	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	67,704	179,967	13,689	9,995	8,371	111	279,837
Segmental gross profit/(loss)	5,366	16,031	(849)	1,487	4,634	99	26,768
Impairment of inventory for aborted pipeline assets	-	-	-	-	-	(276)	(276)
Exceptional impairment of land assets	-	-	-	-	-	(6,100)	(6,100)
Exceptional impairment of right‑of‑use assets	(1,010)	-	-	-	-	-	(1,010)
Gross profit/(loss)	4,356	16,031	(849)	1,487	4,634	(6,277)	19,382
Administration expenses	-	-	-	-	(4,834)	(23,472)	(28,306)
Profit on disposal of subsidiary	8,163	-	-	-	-	-	8,163
Exceptional administrative expenses	-	-	-	-	-	(5,000)	(5,000)
Operating profit/(loss)	12,519	16,031	(849)	1,487	(200)	(34,749)	(5,761)
Share of loss in joint ventures	-	-	-	-	-	--	-
Finance income	-	-	-	-	-	1,359	1,359
Finance costs	-	-	-	-	-	(2,097)	(2,097)
Exceptional finance costs	-	-	-	-	-	(2,181)	(2,181)
Profit/(loss) before tax	12,519	16,031	(849)	1,487	(200)	(37,668)	(8,680)
Taxation	-	-	-	-	-	274	274
Continuing profit/(loss) for the year	12,519	16,031	(849)	1,487	(200)	(37,394)	(8,406)
Loss for the year attributable to ordinary equity shareholders of the parent							(8,406)
Inventory and work in progress	41,023	23,061	20,861	210	-	1,696	86,851

	Student		Affordable		Accommodation
	Accommodation	Build To Rent	Homes	Refresh	Management	Corporate	Total
Year ended 30 September 2024	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	117,604	211,267	12,879	10,896	8,064	1,661	362,371
Segmental gross profit/(loss)	13,634	18,019	(232)	1,548	4,390	(2,784)	34,575
Impairment of land assets	-	-	-	-	-	(769)	(769)
Gross profit/(loss)	13,634	18,019	(232)	1,548	4,390	(3,553)	33,806
Administration expenses	-	-	-	-	(4,799)	(24,700)	(29,499)
Profit on disposal of subsidiary	6,260	-	-	-	-	-	6,260
Exceptional administrative expenses	-	-	-	-	-	(7,001)	(7,001)
Operating profit/(loss)	19,894	18,019	(232)	1,548	(409)	(35,254)	3,566
Share of loss in joint ventures	-	-	-	-	-	(8)	(8)
Finance income	-	-	-	-	-	1,008	1,008
Finance costs	-	-	-	-	-	(2,356)	(2,356)
Exceptional finance costs	-	-	-	-	-	(2,517)	(2,517)
Profit/(loss) before tax	19,894	18,019	(232)	1,548	(409)	(39,127)	(307)
Taxation	-	-	-	-	-	2,202	2,202
Continuing profit/(loss) for the year	19,894	18,019	(232)	1,548	(409)	(36,925)	1,895
Profit for the year attributable to ordinary equity shareholders of the parent							1,895
Inventory and work in progress	42,701	25,958	23,511	508	-	1,588	94,266

6. Exceptional costs

	Year ended	Year ended
	30 September	30 September
	2025	2024
	£'000	£'000
Recognised in cost of sales
Impairment of land asset	6,100	-
Impairment of right-of-use asset	1,010	-
Total exceptional items recognised in cost of sales	7,110	-
Recognised in administrative expenses
Building Safety provision	5,000	7,001
Total exceptional items recognised in administrative expenses	5,000	7,001
Recognised in finance costs
Unwind of discount rate on Building Safety provision	2,181	2,517
Total exceptional items recognised in finance costs	2,181	2,517
Total exceptional costs	14,291	9,518

During the year the Group obtained an independent valuation of one of its land assets which identified that, as a result of adverse market conditions specific to that location and the circumstances of the property in question, the realisable value for the asset was below its carrying value. As a result, the Group has taken an exceptional impairment charge of £6,100,000.

Due to lower than expected occupancy rates in one of the Group's student leasehold properties, the Group has taken an impairment charge of £1,010,000 against the associated IFRS 16 right-of-use asset to reduce the carrying value to the net present value of expected cash flows for the property.

There has been an additional charge of £5,000,000 (2024: charge of £7,001,000) taken in relation to provisions made for Building Safety related costs. The provision made in the prior year has been unwound to its present value, resulting in £2,181,000 (2024: £2,517,000) of finance costs. Further information on these charges is included in note 4 and note 11.

All of the exceptional costs in the year were treated as allowable deductions for corporation tax purposes.

7. Total operating profit

This is stated after charging:

	Year ended	Year ended
	30 September	30 September
	2025	2024
	£'000	£'000
Audit services to the parent company	100	100
Audit services to the subsidiaries	425	425
Amortisation of intangible assets	559	559
Impairment of land assets (see note 6)	6,376	769
Depreciation:
Property, plant and equipment	691	411
Investment property (leased)	4,532	4,432
Right-of-use assets	1,359	1,503
Loss on disposal of property, plant and equipment	11	91

8. Income taxes

	Year ended	Year ended
	30 September	30 September
	2025	2024
	£'000	£'000
Current income tax
UK corporation tax on profits for the year	-	-
Adjustments in respect of prior periods	(415)	745
Foreign taxes	-	-
Total current tax	(415)	745
Deferred tax
Origination and reversal of temporary differences	141	(1,272)
Adjustments in respect of prior year	-	(1,675)
Remeasurement of deferred tax for changes in tax rates	-	-
Total deferred tax	141	(2,947)
Total tax credit	(274)	(2,202)

Reconciliation of total tax credit:

	Year ended	Year ended
	30 September	30 September
	2025	2024
	£'000	£'000
Loss before tax	(8,680)	(307)
Loss multiplied by standard rate of corporation tax in the UK of 25% (2024: 25%)	(2,170)	(77)
Fixed asset differences	26	-
Expenses not deductible	258	369
Income not taxable	(2,041)	(1,565)
Deferred tax not recognised	4,068	-
Other differences	-	25
Adjustments in respect of prior periods	(415)	745
Prior year adjustment to deferred tax	-	(1,699)
At the effective rate of tax of 12.6% (2024: 717.3%)	(274)	(2,202)
Income tax credit reported in the statement of profit or loss	(274)	(2,202)

As a result of the Finance Act 2021, the rate of UK corporation tax increased to 25% from 6 April 2023. The deferred tax assets and liabilities held by the Group at the start of the current year reflect this increase. The deferred tax asset arising from losses in the period has not been recognised.

The Group has a current tax debtor of £2,911,000 (2024: £2,461,000) in relation to historic payments made on account.

9. Earnings per share

The following table reflects the income and share data used in the basic and diluted EPS computations:

	Year ended	Year ended
	30 September	30 September
	2025	2024
	£'000	£'000
(Loss)/profit for the year attributable to ordinary equity holders of the parent	(8,406)	1,895
Add back exceptional costs for the year (note 6)	14,291	9,518
Less corporation tax benefit from exceptional costs for the year	-	(2,380)
Adjusted profit for the year attributable to ordinary equity holders of the parent (excluding exceptional items after tax)	5,885	9,033

	Year ended	Year ended
	30 September	30 September
	2025	2024
	Number of	Number of
	shares	shares
Weighted average number of ordinary shares for basic earnings per share	256,653,097	256,564,829
Adjustment for the effects of dilutive potential ordinary shares	574,738	1,736,691
Weighted average number for diluted earnings per share	257,227,835	258,301,520

	Year ended	Year ended
	30 September	30 September
	2025	2024
	Pence	Pence
Basic (loss)/earnings per share
Basic (loss)/profit for the year attributable to ordinary equity holders of the parent	(3.275)	0.739
Adjusted basic earnings per share (excluding exceptional items after tax)
Adjusted profit for the year attributable to ordinary equity holders of the parent	2.293	3.521
Diluted (loss)/earnings per share
Basic (loss)/profit for the year attributable to diluted equity holders of the parent	(3.275)	0.734
Adjusted diluted earnings per share (excluding exceptional items after tax)
Adjusted profit for the year attributable to diluted equity holders of the parent	2.288	3.497

10. Dividends

No final dividend is proposed for the year ended 30 September 2025 (2024: nil pence per ordinary share). As such, no liability (2024: liability of £nil) has been recognised at that date. At 30 September 2025, the Company had distributable reserves available of £42,257,000 (30 September 2024: £41,643,000).

11. Provisions

Building Safety provision

		Reimbursement
	Provision	asset	Total
	£'000	£'000	£'000
At 1 October 2023	65,594	(10,865)	54,729
Arising during year	8,147	(1,146)	7,001
(Utilised)/received	(21,125)	4,894	(16,231)
Unwind of discount rate	3,017	(500)	2,517
At 1 October 2024	55,633	(7,617)	48,016
Arising during year	8,709	(3,709)	5,000
(Utilised )/received	(10,162)	1,397	(8,765)
Unwind of discount rate	2,527	(346)	2,181
At 30 September 2025	56,707	(10,275)	46,432

The balance can be classified as follows:

		Reimbursement
	Provision	asset	Total
Year ended 30 September 2025	£'000	£'000	£'000
Current	22,286	(2,565)	19,721
Non-current	34,421	(7,710)	26,711
Total	56,707	(10,275)	46,432

		Reimbursement
	Provision	asset	Total
Year ended 30 September 2024	£'000	£'000	£'000
Current	12,090	(1,470)	10,620
Non-current	43,543	(6,147)	37,396
Total	55,633	(7,617)	48,016

A provision of £48,016,000 was held at 30 September 2024, net of reimbursement assets, for the Group's anticipated contribution towards the cost of building safety remedial works. Provisions and reimbursement assets are not offset in the balance sheet, although movements in these are presented net in the income statement.

A further net increase in provision of £5,000,000 has been made during the year ended 30 September 2025 for building safety remediation costs. The judgements and estimates surrounding this provision and corresponding reimbursement assets are set out in note 4.

The net provision at 30 September 2025 amounts to £46,432,000, of which £19,721,000 is expected to be incurred in the year ending 30 September 2026 and £26,711,000 is expected to be incurred between 1 October 2026 and 30 September 2029. The provision has been discounted to the present value of its risk-adjusted cashflows, at a risk-free rate of 3.89% based on UK five-year gilt yields (2024: 4.54%).

12. Reconciliation of profit before tax to net cash flows from operating activities

	Year ended	Year ended
	30 September	30 September
	2025	2024
	£'000	£'000
Loss before tax	(8,680)	(307)
Depreciation of leased investment properties and right-of-use assets	5,892	5,935
Impairment of right-of-use assets	1,010	-
Depreciation of plant and equipment	691	411
Amortisation of intangible assets	559	559
Profit on disposal of subsidiary	(8,163)	(6,260)
Loss on disposal of property, plant and equipment	11	91
Finance income	(1,359)	(1,008)
Finance costs	4,278	4,873
Share of loss in joint ventures	-	8
Decrease in inventory and work in progress	856	10,711
Decrease in contract assets	7,415	29,830
(Increase)/decrease in trade and other receivables	(9,823)	3,913
Increase in contract liabilities	753	1,783
(Increase)/decrease in reimbursement assets	(2,312)	3,748
Decrease in trade and other payables	(3,418)	(14,689)
Decrease in provisions	(1,453)	(12,978)
Increase in share‑based payment reserve	642	901
Net cash (outflow)/inflow from operating activities	(13,101)	27,521

13. Analysis of net cash/(debt)

	At beginning		Other
	of year	Cash flow	movements	At end of year
30 September 2025	£'000	£'000	£'000	£'000
Cash at bank and in hand	96,962	(16,564)	-	80,398
Bank loans	(13,591)	3,441	217	(9,933)
Net cash before deducting lease liabilities	83,371	(13,123)	217	70,465
Lease liabilities	(40,769)	9,277	(2,139)	(33,631)
Net cash/(debt)	42,602	(3,846)	(1,922)	36,834

	At beginning		Other
	of year	Cash flow	movements	At end of year
30 September 2024	£'000	£'000	£'000	£'000
Cash at bank and in hand	72,431	24,531	-	96,962
Bank loans	(28,530)	15,064	(125)	(13,591)
Net cash before deducting lease liabilities	43,901	39,595	(125)	83,371
Lease liabilities	(45,195)	9,089	(4,663)	(40,769)
Net cash/(debt)	(1,294)	48,684	(4,788)	42,602

Cash at bank and in hand as at 30 September 2025 includes £40,000 of cash deposited by the Group in an escrow account in connection with a development in progress, access to which is contingent upon the completion of certain development works (30 September 2024: £53,000). Non‑cash movements relate to the amortisation of bank loan arrangement fees and changes to the value of lease liabilities as a result of leases entered into or terminated in the period or due to movements in the rent inflation rates assumed

14. Annual Report

Copies of this announcement are available from the Company at 12 Soho Square, London W1D 3QF. The Group's Annual Report for the year ended 30 September 2025 will be posted to shareholders shortly and will be available on our website at www.watkinjonesplc.com.

_[ENDS]

 

END