Good morning, ladies and gentlemen, and welcome to the Watkin Jones PLC Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so on the Investor Meet Company platform. And before we begin, I would just like to submit the following poll, and if you'd give that your kind attention, I'm sure the company would be most grateful.
I would now like to hand you over to the executive management team from Watkin Jones PLC. Alex, good morning, sir.
Good morning, and welcome to the 2024 Half Year Results for Watkin Jones. I'm Alex Pease, the Chief Executive for Watkin Jones, and I'll be joined in presenting our results this morning by Sarah Sergeant, our CFO. So moving on to the agenda. The agenda for this morning will begin with a short overview from myself reflecting on the key operational and market updates for Watkin Jones at the half-year period. Sarah will then take you through the financial performance and the outlook for the remainder of 2024, and she'll also touch on our property management business, Fresh, and also our continued focus on ESG and our Future Foundations programmememe. I will then provide a more detailed review of the operational, investment, and transactional markets in which we operate, the gradually improving sentiment, and the challenges and opportunities that they represent.
So, turning to the summary page, the theme of my overview is one of continued operational progress, and I think this captures the core focus of the business over this H1 period. We've been continuing to control the controllable and looking to make incremental gains across all of our operational activities. And for those of you that joined us in January, you'll see that the continued theme really focusing on what we as a business can do to improve. The significant and varied headwinds of 2023 have dissipated to a reasonable degree, but the market has continued to hold challenges as the economic recovery, reduction in inflation, and interest rate cuts have not progressed at the pace the property sector would like to have seen. Sarah will provide a detailed review of our financial performance.
However, from my perspective, it has been pleasing to see the significant efforts, focus, and control put in place across the business help yield some positive progress across our key financial metrics. We've improved both revenues and profit in the period, reducing debt and maintaining a strong cash position. We continue to have good visibility of forward-sold revenue, with over GBP 400 million still to come through between FY 2024 and FY 2027. We are also looking to sustain and grow our development pipeline. The business has continued to deliver operationally, making positive steps forward across our key functions. If you remember, back in January, we spoke of improving investor sentiment with a Watkin Jones development asset in legals which had yet to be crystallized into actual transactional evidence.
It was therefore very positive in March to close the forward fund sale of our PBSA scheme in Bristol to Hines, a new investor partner to the group. We have subsequently put a further development asset under offer and are well progressed in our legal negotiations. We have also sought to remain proactive in the land market, acquiring 2 new conditional on-planning land acquisitions. We believe there will be more opportunity in land as the year progresses. We have also made progress with our existing development pipeline, actively managing assets to improve viability and submitting planning on 4 schemes with potential beds totaling 3,000+. On the build side, inflation and supply chain shortfalls have moderated, and it's been reassuring to have practically completed 4 assets or phases of schemes and to see our current developments in build performing materially to programmeme and budget. Excuse me.
We've made encouraging early progress on our new business stream Refresh launched in January and which focuses on the refurbishment and repurposing of the existing assets. The wider market sectors we operate continue to offer support and opportunity looking into the medium term. Supply and demand imbalances continue to grow, and this in turn is helping fuel operational performance of assets. To date, it is a cautious market recovery with slower-than-expected interest rate cuts slowing transactional activity. However, investor sentiment continues to improve, and there remains considerable capital allocations to deploy in the UK. Watkin Jones remains a market-leading developer, deliverer, and operator of residential for rent in the UK. We've got an absolute focus on positioning the business for growth to make sure we are as fit and well equipped to capitalise as we begin a new market cycle and economic conditions rebalance.
I'll now hand over to Sarah for a review of our financial results.
Thank you, Alex. I will now take you through the financial highlights for the half year 2024, review our mid-market guidance for the full year, and then comment on the positive changes we've had in building our pipeline. I will start with our financial performance. Importantly, these results show a return to profitability for Watkin Jones and progress across all key financial metrics. We've reported strong revenue of GBP 175 million, which has come predominantly from the build-out of our forward-sold developments and also the forward sale of our student scheme in Bristol which closed in March. Notably, this was a 14% increase on the prior period. Our gross profit was GBP 18 million compared to GBP 16 million in the prior period, with gross margin at 10.5% and in line with our margin guidance.
The segmental analysis is set out in the appendix but shows relatively stable revenues in the year of GBP 100 million and a gross margin of 9.3%, but a 25% increase in student revenues to GBP 61 million. The student gross margin of 11.6% is ahead of last year. This gross profit flowed through to operating profit of GBP 4 million compared to GBP 1.8 million in the prior period, with some overhead efficiencies supporting the bottom line. We have a net interest charge of GBP 0.6 million compared to GBP 1.5 million in the prior period, reflecting the benefit of the continued good financial management, higher interest income, a reduced non-utilisation fee from our RCF reduction, and reduced interest payable following the debt paydown last year.
The board has decided not to declare an interim dividend, with the maintenance of financial flexibility being the priority instead. Now moving on to the cash. We've continued to have great focus on our cash management, and this has resulted in a small cash inflow from operating activities compared to outflows in the prior periods. This has been driven by the disposal of our student scheme in March and the unwind of working capital following practical completions of schemes. This has also resulted in a reduction in our debt position from GBP 29 million at year end to GBP 23 million now, and our view is that this borrowing position remains conservative with room for growth. So with gross cash of GBP 67 million and the headroom we have on our facility and our overdraft, we have cash and available facilities of GBP 104 million.
Moving on to the balance sheet, you can see that land and work in progress has decreased as a result of the disposal of our Bristol student scheme. Other current assets, which comprise contract assets and trade receivables, have reduced by GBP 15 million, reflecting the receipt of bullet payments and as we outlined at the full-year results in January. Of the contract asset balance of GBP 53 million at the 31st of March, over half of it is due to be received in the second half. We have spent GBP 10 million of our building safety provision in the period and received a small amount of recoveries in cash, resulting in a gross provision of GBP 56 million at the end of March offset by agreed client contributions, which are shown here as reimbursement assets of GBP 10 million.
We've continued to make good progress at working through our legacy building provision, completing three properties in the period and spending GBP 10 million, which is very much in line with our expectations. Positively, all the live schemes are progressing in line with their budgeted costs, and the forecast base cash spend is in line with our expectations. This is an area where there remains significant uncertainty, and we do continue to monitor closely as the status of assets and scope of the cost and works continues to evolve. Importantly, our provision remains unchanged at the end of March, and we're continuing to look at recoveries from down the supply chain. We'll now move on to our operating profit outlook for the full year.
This slide demonstrates the build of our forecast from our half-year position and shows we have progressive operating profit for the full year before any further forward sales. This is made up of follows. Our forward-sold revenue, which is contractually secure, of GBP 150 million at approximately 10% gross margin, that's represented by the beige block on the chart. The gross margin contribution from our Fresh business, represented by the blue block, offset by our overheads, which here is shown in red. As we previously outlined, profit weight H2 weighted and the operating profit to be secured, shown here by the shaded red block, can be made up from a combination of the sites that we have in the market.
These comprise one student scheme, which is well advanced in legals, and two schemes which have planning consent and are currently being marketed. We also have further secured sites which we are progressing through planning and will also have the potential to contribute to the full year position. But of course, we do need to be mindful of the wider environment and note that a slower-than-expected reduction in interest rates or another macroeconomic shock could impact these transactions and therefore the pace of recovery. Looking forward, this slide gives guidance to our full year secured cash position. The key point here is that we'll have another significant unwind of working capital in the form of final bullet payments for schemes we've completed. This amounts to over GBP 25 million.
This combined with working capital outflow on the live schemes will give us a strong secured cash position for the full year before any further forward sales. Now moving on to the pipeline where we've continued to make progression. This is an update of the slide that we showed at the full year, which sets out an illustrative recovery profile for the business with the potential for us to build back to a GBP 30 million PBIT business over this three-year period. Underpinning this is our secured pipeline of GBP 1.4 billion. This is very much anchored on our level of forward-sold revenue of GBP 400 million, shown here in the beige blocks, which will come through in this financial year, FY 2025 and FY 2026. This metric, of course, has been augmented by the forward sale of our student scheme in March.
We also have GBP 250 million of revenue of schemes that we have in the market, and then we have GBP 800 million of revenue from sites which are secured and working through planning. This description has increased by GBP 100 million since our last update due to the one new student scheme we've secured. We're also looking at much more new land opportunities, looking to secure schemes worth GBP 300 million, and these are currently in legals, and Alex will give some more color on those later. There is still some drag on margin from the schemes we sold in FY 2022 and FY 2023, which will continue to impact FY 2026, but the margin on new assets, which we're seeing coming through at 14%-15%, will build back to a now more normalized position, giving us a blended 12% in FY 2026.
Just to point out, this slide just represents our student BTR and affordable homes pipeline. For modeling purposes, we need to include the additional gross margin from Fresh. Now moving on to Fresh. Operationally, Fresh has performed well in the first months of the year, with occupancy levels above 97% and rental growth on average at 7%. Bookings for the next academic year have also been tracking ahead of last year. The business has been working hard to rebuild its units under management following the loss of a large client portfolio at the start of the year, which was taken in-house, and the business has had good success in achieving this objective. It's onboarded two new schemes and has a number of student schemes mobilizing for the start of the next academic year, with current units under management just over 20,000.
There has, however, been significant movement in the competitor landscape, with third-party operators being bought out by owner operators, for example, the Homes for Students acquisition by Far East Orchard. This is evolving, this is feeding into an evolving fee and contract structure, which we will continue to keep under review, but we do see Fresh as well placed in the market as a true independent third-party operator. Looking forward, Fresh has an active pipeline of over 7,000 units, and the business is also, it's also strategically reviewing its BTR offering. And finally, I'll touch on ESG. We've continued to make good progress across the three pillars of our ESG strategy: people, places, and planet, and it remains central to our construction and operational activities. Excuse me. We've diverted an average of 99% of waste away from landfill, which is ahead of our 2025 target.
As we set out in the full year, we're working to reduce our carbon footprint, and we've had some good successes in the period. We have supply partnerships in place for the reuse of primary materials. We're trialing a scheme where we return all excess plasterboard to the manufacturer for specialist recycling. We've also trialed new spec aluminum windows, which are made from 75% recycled material. But of course, all of this wouldn't be possible without our supplier base, and we hosted our second supplier conference in March. We've continued to have people at the heart of our strategy with numerous engagement events across different areas of the business, including a charity walk up Snowdon a couple of weeks ago. We'll now hand back to Alex to cover the market in more detail.
Thanks, Sarah. So now turning to some of the key themes prevalent in our residential sectors. Here, the core fundamentals continue to offer strong support for the residential sector and the Watkin Jones business. Supply of new Build to Rent and PBSA stock being delivered remains highly constrained as starts on sites have decreased. This supply lag will continue over the next few years as planning applications and consents are also significantly down. The demand pool on the other side for PBSA has continued to grow over the last 10 years through both international and UK domestic students. In Build to Rent, there is significant forecast demand fuelled by growing populations, shrinking household sizes, and changing lifestyle habits. These imbalances and shortfalls have driven strong operational performance across the residential for rent sectors. Rental growth remains strong. However, this is moderated from a double-digit growth recorded in 2022, 2023.
We review this moderation as a positive for the sector, ensuring sustainable growth. The operational performance is helping the investment market recovery get underway, which I will go into more detail shortly. As reported at our full year results, the acute build cost inflation and supply chain challenges experienced have to a large extent normalized. We are not yet seeing deflation at a holistic build cost level, though, but there has been deflation in some materials and goods. We continue to monitor the various global geopolitical tensions, which could put pressure on materials and supply, and we are actively looking to put further resilience into our supply chain. We believe the barriers to entry for our markets remain high, and these have been exacerbated by the continuing evolution in planning and legislation around Building Safety Act, ESG, and design criteria.
We believe that Watkin Jones are well placed to utilize our scale and specialist focus and skill sets to take advantage here. In terms of investor sentiment, as mentioned earlier, we are continuing to see a gradual improvement in investor sentiment and activity. The sector fundamentals and maturity of the UK market is ensuring that UK residential for rent is a key target still for capital allocations. We are increasingly seeing new entrants announcing investment or plans to invest, with the likes of Aviva, Legal & General, and PGIM having already transacted, and others such as Landmark Properties, Thor Equities, and Cadillac Fairview announcing new UK platforms recently. At this stage, the investment market recovery remains cautious in the short term as some investors delay decision making or the pace of progressing transactions while waiting for more certainty or evidence on interest rate cuts coming through.
We expect there to be an uptick in activity as clarity on trajectory rate reductions emerges. So how does this feed through into sort of transactional volumes? Well, transaction volumes in Q1 2024 show levels at circa GBP 1.3 billion of investment, which is slightly below the long-term average for the sectors. The volumes do show a bias towards PBSA transactions of circa 60%. This is most likely reflecting the enhanced viability characteristics of PBSA and the fact it's a more established asset class with a greater quantum of stock available to trade. Importantly, in recent months, there have been several key and potentially benchmark transactions to include Legal & General entering the direct-let PBSA market and both KKR and Goldman Sachs acquiring Build to Rent blocks in Wembley.
The yield and pricing for these transactions are viewed as strong and a positive that core and core plus capital are starting to deploy again in volume. From a Watkin Jones perspective, as discussed, we have closed a forward fund sale to Hines of a PBSA scheme in Bristol, representing a new client for Watkin Jones and also a continued appetite for forward fund opportunities. We are now under offer on a further development scheme and are well progressed in legals with this transaction. Anecdotally, since the new year, we've seen a good increase in interest from investors reviewing new opportunities, accessing data rooms, and underwriting bids. Alongside our typical forward fund sales, we are continuing to explore potential alternative funding structures, which can provide secure base margin returns but also potential upside profits from market recovery performance.
Again, moving to the other side and the land market and how we might take advantage. The U.K. land market does remain idiosyncratic. What do I mean by that? Well, transaction levels have increased substantially year-on-year, albeit that this was off an extremely low base in Q1 2024. Land pricing remains depressed. However, there is often significant variance in land pricing, largely driven by its location, its unique development attributes, and the status of its owner. Are they a forced seller? Have they held the site a long time? You know, all of that comes into play. From a Watkin Jones perspective, we remain proactive in the market, continuing to enhance our national coverage through internal and external conduits.
Whilst viability challenges do remain, we are identifying more opportunities both on and off market and a greater willingness from vendors to negotiate on price and structure. We believe that there's further opportunity ahead, and it will continue to emerge as we progress through the year. In the half year, we have secured 2 new PBSA sites on a subject to planning basis, and we have a further 3 assets under exclusivity as we work through legals and technical due diligence. Moving now to the planning side of things. As a general election approaches, the U.K. planning system and how to fix it will undoubtedly feature large on most of the parties' various manifestos.
It's clear to see that residential planning applications and consents have declined significantly in the last few years as a result in part to the challenged economic environment, but also due to the continued evolving and complicating legislative and planning backdrop, particularly areas orienting around ESG, design, and the Building Safety Act. These enhanced requirements and required knowledge and skill base potentially increase the barriers to entry for some developers. For Watkin Jones, we believe this is an opportunity to lever our scale, specialist focus, and integrated development model to drive a key competitive advantage addressing these requirements. Our typical target markets continue to align well with national brownfield and urban regeneration policies. We have a specialist team which maintains a very strong planning track record, and in the period, we've submitted applications for over 3,000 student bed spaces.
If you remember back in January, we also touched on a new model that we were trialling called Refresh. Just to give you a bit of an update on our progress so far. Look, we've made encouraging early progress with this Refresh business stream, which is looking to target redevelopment, refurbishment, and repositioning of assets for clients. We've appointed a senior director to lead the delivery side of this business and established internal structures and governance. Importantly to note, this will have minimal impact on overheads in the early years. We've also undertaken a soft launch to both the market and our supply chain, which has been universally well received. The team have already secured two smaller projects under contract, helping to prove concept for us and test our various processes. We've also offered the three opportunities in exclusivity.
We continue legals and due diligence on a larger university-led redevelopment scheme, which we alluded to in our full year update, and this is progressing well. We've will continue to update our shareholders as this business stream develops, but again, good early progress. So in summary, throughout the period, we've made positive steps forward across our key financial performance metrics. We've continued to focus on the controllable within the business, looking to drive incremental progress and value across our core business functions. The strong residential supply and demand fundamentals endure and support the robust operational results and outlook for our sectors. Investor appetites and capital allocations have been sustained despite the economic headwinds, and whilst the market recovery has been gradual, there is certainly improving investor and transactional sentiment.
In summary, Watkin Jones remains a market-leading business, and we continue to position ourselves for growth as the economy recovers and a new property cycle begins. Thanks very much for your time this morning, and we'll now move through to a Q and A session. I know that a number of questions have already been submitted, which we will sort of respond to in turn, but if you do have questions, please put them into the Q and A slide. Okay.
Perfect. Perfect, Alex. Sarah, if I may just jump back in there. Thank you very much indeed for your presentation this morning. Well, I'll just I'll just bring back up your cameras now. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right-hand corner of your screen. But just while the company take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your investor dashboard. Sarah, Alex, as you can see there in the Q and A tab on the right-hand side, we have received a number of questions throughout your presentation this morning.
Thank you to all of those on the call for taking the time to submit their questions. But Alex, Sarah, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you.
Sure. No problem. Okay. So coming to the first question, again, I won't read out people's names who submitted them, but, except on this one, because John Davis has asked quite a specific question about a specific scheme. But the gist of the question is, management team are doing a great job building back the company's financial position, but with regards, the provision and in particular Wales and signing up to sort of the pledges with the Welsh government, where is your progress on this, and, you know, what's the timeframes? So John, we will respond in more detail to your question because it is quite a detailed one, but fundamentally we're making good progress with the Welsh government. We've met with them. We've got a way forward which we think works for both parties.
It's always been our intention to make sure that leaseholders are protected, in their various schemes, and we continue to maintain that sort of standpoint. So yeah, look, we're making good progress. Also, you know, we've been waiting for technical reports to come back on the particular assets, which have now come back, and we're able to sort of move forward with the plans for that scheme. So I'll come back to you, but yeah, fundamentally progress is being made, and we're working well with the Welsh Government. The next question. How significant was the impact of the forward sale of Gas Lane PBSA scheme on the overall revenue and profit for the period? Are there any similar forward sales expected in the second half of the year that could impact financial performance?
So Sarah, do you want to cover the first part of that, and I can cover the second part?
Yeah, of course. So for Gas Lane, the revenue contribution in the half year was circa GBP 20 million, and profit gross margin was very much in line with 10% in line with where we've obviously guided.
Okay. And look, in terms of sales for the rest of the year, yeah, look, clearly, in order for us to hit our consensus figures, which, you know, we're still targeting, there's a number of things that we need to do as a business, and sales are some of those. So I think as we said in the presentation, we have a further scheme, development scheme well progressed in legals, which we are looking to close. We also have two assets which have consent and are planning consent and are sat on our balance sheet, which we are actively in the market, discussing with investors. And then we have two further schemes which don't yet have planning, but we have reasonable visibility that, yeah, planning should come through. It's never a certainty in these things, but it's being well received.
If it comes through in the timeframes, then we still have the opportunity to sell those schemes. The reality for us in the second half of the year, we do want to make sure we sell the scheme in legals, and then to hit consensus, we can do that by a combination of selling probably minimum two of the four assets, that I just alluded to. It will clearly be dependent on what price we sell the assets for and also the timeframes when we sell them. Effectively, there's a number of different routes through to us to be able to try and hit consensus position. Hopefully that covers that one. How confident are you that further building safety provisions will not need to be made? Sarah, do you want to cover that?
Yeah, sure. I think there's a number of provision questions, so I'll probably cover them all together. I might start with one. There's one talking about the net impact of our building safety activities. So why don't we talk about what we have in the balance sheet at the moment, and then we can go on to, I guess, the kind of wider question. So the net provision that we have in the balance sheet at the end of March is GBP 46 million, and that's comprised of a gross provision of GBP 56 million, less GBP 10 million contributions that we've agreed from builders building owners. So effectively, we're saying our provision or cash outflow will be GBP 46 million.
We're guiding that would take over the next 5 years, but with circa GBP 15 million-GBP 20 million next year and then the balance spread over or the tail spread over the many years. And as we said, we will continue to look at further recoveries that potentially could come for us from down the supply chain. I think in terms of the uncertainty, I mean, I guess the point is that, you know, I don't think there's any CFO or CEO in the sector who could say hand on heart that the provision is complete just given the changes in the industry and the changes in the legislation. I think we flip to then what we have done.
So we've obviously had a third party who's gone through the costs we have for each property and obviously assured us on those. As I said in my part, the buildings that we are working on at the moment are very much in line with the budget, so we made that assessment correctly. We are continuing, as I said, to go down the supply chain, and then we also have very much a level of appropriate contingency both on a property-by-property basis but also a level of general contingency, to safeguard against any further movements. So it's one that we're, you know, we are very much trying to work through.
From a cash perspective, we obviously, because we're doing the remedial work ourselves, we have control over that cash outflow, and obviously we're getting kind of good experience from doing it, which we're trying to build into another part of our business Refresh as Alex has alluded to. Alex, is there anything you'd add to that?
No, I think covers it. It's yeah, no, you've covered it well. Okay, so next question. What do the yields on your project, i.e. Bristol, compare with the Q1 transactions you showed on slide 19? So yeah, look, I think it's quite difficult to compare like-for-like yields because a yield measure is useful illustratively, but it all depends on, you know, the purchaser's own assumptions in terms of what rental growth they put on, what various other assumptions. But broadly, Bristol, asset that we sold, was in a sort of high 5% sort of, you know, top end of the 5% yield profile, and the student deals, which I alluded to from Legal & General, were at a circa 5.35%, net initial yield.
So there was a circa 50 basis point discount, which we would fully expect because the Legal & General acquisition was of trading stock, so already operating with rents coming in. There's always a circa 50 basis point discount when you forward funding deals because they're not yet built, that they won't be built for sort of 2-3 years. So yeah, I would say that we're broadly in line with the transactional activity elsewhere. And I think, look, the important thing with the L&G transaction was, of that sort of yield profile, we can make deal profiles work elsewhere and amongst our other pipeline. So I think it is positive. You know, we need to see more transactions coming through, and obviously that drives competitive tension. But yeah, nevertheless, I think it is supportive.
Just as the sort of KKR and Goldman Sachs acquisitions, they were sort of in the low 4% yield profile. Build to Rent, if you remember, trades at a sharper yield than student typically does. But yeah, while that yield is sort of off the peak numbers, at the top of the market, nevertheless it's supportive, and I think the market views it as positive because people could make deals work at that level. So hopefully that covers it. Are Labour Party policies on development and rents sufficiently clear for investors, or is there a risk that they will wait and see?
Look, yeah, very topical and something, you know, we've been discussing actually internally for, you know, obviously months, you know, knowing that a general election would come at some point or other and then obviously exacerbated by, you know, the snap election called last week. I think overall Labour have not given a huge amount of detail about where their residential and development policies sit, but I think what they have given is broadly supportive. And, you know, I think the key thing with Labour a few years ago was there was a real emphasis on rent controls potentially being considered and coming in, which we do think is, you know, detrimental to the markets that we operate, particularly if not implemented well. And yeah, we don't believe it's the right way to sort of control rents.
We think it's, you know, much better strategies are encouraging more supply to come through and actually help meet the housing sort of crisis. But, you know, it's pleasing to see that Labour have distanced themselves, you know, quite fundamentally from those policies of old. So while it's not come out in formal policy or rhetoric, it's certainly in the press over the last 12 months that they've very much distanced themselves, which is good. They're also saying that they want to fix the planning system and encourage a sort of swifter, more certain journey through. Again, clearly we're very supportive of that. They've said that they're going to bring back housing targets. Again, we're very supportive of that. We think it's very sensible to try and challenge local authorities to deliver more housing stock.
Inevitably, there'll be a focus on affordable housing within, you know, the Labour Party as there should be, and again that doesn't faze us in the slightest. You know, we, everyone's just trying to work through, you know, the viability challenges, you know, that the sector has and make sure that you can provide affordable as part of your offering. So at the moment there's nothing emerged that has, you know, given us great cause for concern. I think as for the timing of a snap election, I think it's much better from a business perspective to rip off the plaster and get on with things. You know, we'd much rather know the result of a general election in July than have it eke out.
You know, if an election had been called for November, I think we'd have had a lot more intransigence. I think as it is, all the market really wants is some certainty about, yeah, we've got a new government in place. It's going to be stable for the foreseeable future, so we can then start planning and acting. So yeah, overall I think the snap election is a positive. Okay, what conditions or financial metrics would need to be met for the board to consider reinstating the dividend? I mean, I'll give a first answer and then Sarah can supplement, if necessary. Look, fundamentally, you know, we've always been a business that wants to pay dividends. That continues. We want to get back to our progressive dividend policy with a 2x cover. That is very much the aspiration for the business.
I think at this point in time, you know, we are right to maintain that sort of financial flexibility. Certainly we would need to sort of sell the assets that we have on balance sheet and look to start demonstrating that there is good consistency in sales coming through. I think that would give a lot of confidence. But I think the flip side to this is, you know, we really want to be on the front foot in regrowing the business's pipeline, getting us back on a growth trajectory, and I think we do need to very much look at what's happening in the Landmark Properties.
If there is sort of further opportunities available to us, we want to be able to make sure that there's the cash there to deploy, and that will help grow the business but also grow the dividend policy, you know, for future years and outgoing years. So hopefully that covers it, Sarah.
Yeah, no, no, I think that all makes sense. There was probably just an adjunct question in terms of, given the current undervalued share price, has the board considered a share buyback programmeme. I think it's very much the same responses to the dividend as to the dividend question in terms of that use of our cash rather than returning to shareholders.
Okay. Is the competitive environment more or less intense compared to three years ago? Yeah, good question. On balance, it's less intense. You know, I think every challenge that we've faced as a developer has been universally faced by other developers. You know, this has been a tough market environment with multiple sort of headwinds from inflation, you know, interest rates, et cetera. You know, a narrative that you all know very well. So, you know, I believe that Watkin Jones are better placed than many developers, to face into these headwinds, and I think particularly going forward, I think there could be some challenges for some of the smaller developers who might not do the scale of business that Watkin Jones does, but they might do one or two schemes a year.
I think the challenges for those guys might increase the additional hurdles that you have to go through now in terms of the Building Safety Act that encourages sort of enhanced design costs at an earlier stage, enhanced knowledge and expertise within the business that you actually have to have accountable people within the business who've had the right training and just a real understanding of how to navigate the new design requirements. I think that will be a challenge for some. I think the other challenge for some of the smaller developers will be counterparty risk. I think coming into a new cycle, investors will be sort of very focused on who their counterparty is, particularly on forward funds and in the contracting market, and they will want to make sure that they've got the appropriate track record and balance sheet to give them that comfort.
So at the moment, I'd say that the competitive landscape is slightly less and there is an opportunity for us, but yeah, that's just a sort of snapshot in time. Let's just see what other ones. That's the. Do you envisage any involvement with social housing schemes? So look, I mean, I think our involvement with social housing, so clearly we will have on the vast majority of our schemes anyway, we will have an element of affordable housing. Now, sometimes it's social housing. More often than not, it tends to be an intermediate rent, which is still very much affordable housing, but it's able to be operated by the private sector as opposed to having to utilize housing associations. So that will continue absolutely.
I think what we launched a couple of years ago was really trying to focus on providing more affordable housing on a single-family housing model, so less high density residential blocks but more on housing estates. Excuse me, I'm just going to take a sip. So that remains, you know, a very interesting market for us, that single-family housing and providing more affordable. It's been quite a challenged market in the last 18 months, and I think rightly as a business we put it on the back burner to focus on our core business of student and Build to Rent. Nevertheless, it is something we'd like to revisit if we feel that the market opportunity remains there. So I think at the moment it's on a low simmer.
We're still completing a scheme which we successfully sort of took through planning and enhanced the affordable housing up in Crewe. But, yeah, it's on the low burn at the moment, and we'll have to sort of check the economic viability and the competitive landscape, as we go forward. Okay, so I think that's covered all of the questions that we can see on the Q&A panel. So if anyone has any further questions, then please sort of put them in now. We'll give you a couple of minutes. Otherwise, look, we'd like to thank you for your time this morning listening to us, and yeah, look, your support's greatly appreciated.
Alex, Sarah, that's great. If I may just jump back in there, thank you very much indeed for being so generous of your time there addressing all of those questions that came in from investors. And of course, if there are any further questions that do come through, we'll make those available to you immediately after the presentation has ended just for you to review and to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform. But Alex, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great.
Yeah, look, I think the closing comments are we are working incredibly hard as a board, as an executive management team, and as a business to regrow the business, position ourselves for growth in a new cycle, and fundamentally, you know, drive back shareholder value, in the business's sort of outturn share price. You know, that is fundamentally what we're here to do. You know, we think we are making progress, and, yeah, we'll continue to work incredibly hard to do so.
That's great. Alex, Sarah, thank you once again for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Watkin Jones PLC, we would like to thank you for attending today's presentation. That now concludes today's session, so good morning to you all.
Thank you.
Thank you.