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On Wednesday, Watkin Jones (LSE:WJG), a London-listed residential property manager and developer, saw its market value decline by nearly a third following a profit warning and a revised outlook for market recovery. The company forecasted adjusted operating profit for the year ending September 30 to fall between £10 million and £12 million. This projection represents a significant increase from the £0.2 million reported in the previous year but is notably below the earlier guidance of at least £15 million provided in May.
Watkin Jones attributed the reduced forecast to weaker-than-anticipated market activity over the summer months. The company cited ongoing uncertainty regarding the pace of interest rate cuts as a primary factor affecting market conditions. As a result, it is now considered unlikely that additional transactions will be completed before the end of the financial year.
Looking forward, Watkin Jones highlighted that the anticipated rate cuts by the Bank of England, including those implemented in early August, along with future reductions, are expected to enhance forward fund liquidity. Despite this, the lower transaction volume experienced this year is projected to impact the fiscal year ending September 2025. The company noted that schemes will not contribute to future revenues until they are forward-sold, suggesting that adjusted operating profits may not experience growth in the upcoming year.
The announcement led to a sharp decline in the company's stock, which fell 29.5% to 35.9p by 11:27 BST. This drop brought the share price to its lowest level since November 2023. The reduced market value reflects investor concerns over the slower recovery and the potential long-term impact on the company's financial performance.
