Student homes and build-to-rent group Watkin Jones has warned it endured a 'slower than expected' summer market. 

The firm lowered its annual profit guidance and said  said 'uncertainty' over the pace of interest rate cuts will weigh on its full-year results. 

Brokers at Peel Hunt downgraded their assessment of Peel Hunt in response, helping to drive its shares sharply lower. 

Watkin Jones' shares slumped 29.08 per cent or 14.80p to 36.10p on Wednesday morning. 

The Aim-listed business said it was 'unlikely' to complete any further deals before the end of its current reporting period at the end of September. 

Watkin Jones lowered its annual profit guidance to between £10million and £12million, while gross cash is now expected to be £80million and net cash will be approximately £65million, coming in ahead of forecasts.  

It said: 'While the absence of further forward funds prior to the year end will result in performance being lower than previously anticipated, the Group is expected to show material improvement in FY24, with adjusted operating profit currently expected to be in the range of £10million to £12million (FY23: £0.2million).'

In 2023, the group posted an annual profit of £0.2million and had a gross cash of £67million. 

Analysts at Peel Hunt cut full-year pre-tax profit expectations by 42 per cent from £13million to £7.5million for 2024, but noted Watkin Jones' net cash 'is in better shape than expected'.

They added: 'We assume a slow recovery in activity, but a quicker decline in interest rates would be a catalyst for increased activity.'