14 October 2015
Telford Homes Plc (AIM:TEF), the London focused residential property developer, is pleased to give the following trading update ahead of its interim results for the six months ended 30 September 2015, which will be released on Wednesday, 2 December 2015.
- Profit before tax for the six months to 30 September 2015 expected to more than double compared to the equivalent period last year (H1 2014: £9.4 million)
- Strong forward sold position of over £685 million to be recognised across five financial years (31 March 2015: over £550 million)
- The Group has acquired the regeneration business of United House Developments which has the potential to add some £500 million of revenue to the existing £1 billion development pipeline
- Planning permissions secured at key sites including Caledonian Road (156 homes), Chobham Farm (471 homes) and Redclyffe Road (192 homes)
- Group well on track to deliver growth and profit expectations for the year to 31 March 2016 and beyond
Telford Homes remains focused on relatively affordable locations in non-prime inner London where the average price of an open market home is typically between £500 and £800 per square foot. At this price level demand from investors, tenants and owner-occupiers continues to be strong and yet there are still not enough new homes being constructed. Whilst there has been a necessary and expected slowing in demand for prime property, this is a very different market to those in which the Group operates.
The Group has recently opened a new sales and marketing centre in Stratford to give Telford Homes a permanent presence in the heart of its area of operation. The remaining 32 homes at Stratosphere were launched from this centre on 8 October with 18 reservations secured by the end of the first day. Following several successful sales launches in the last six months, the Group's forward sold position currently stands at over £685 million to be recognised across five financial years from the year to 31 March 2016 onwards (31 March 2015: over £550 million).
Legal completions on forward sold homes are also being achieved in line with expectations. These completions are weighted towards the first half of the current financial year and, as a result, the Board anticipates that profit before tax for the six months to 30 September 2015 will more than double compared to the equivalent period last year. Given the forward sold position the Group remains well on track to meet profit expectations for the year to 31 March 2016 and beyond.
On 21 September 2015 the Group reported that it had acquired the regeneration business of United House Developments. The developments that were acquired in this transaction are all in the Group's core area and have the potential to add some £500 million of revenue to the existing £1 billion development pipeline. As a result of the anticipated timing and phasing of some of the developments, Telford Homes now has an enhanced longer term strategic pipeline stretching over the next eight years and this represents an excellent platform for further investment and future growth.
The Group has also achieved significant success in progressing planning for several of its key developments. The Board is pleased to report that, after an initial delay, full planning permission is in place for 156 homes at Caledonian Road, N1 and work is underway on site. In addition planning permission has been granted in the last few weeks for 471 homes at Chobham Farm, Stratford in partnership with Notting Hill Housing Group and for 192 homes at Redclyffe Road, E6. Both of these were approved at recent planning meetings and are subject to signing the usual legal agreements.
The fundamental lack of supply of new homes at an affordable price in London continues to underpin the Group's growth plans over the next few years. In addition demand remains high from all of the Group's typical customers such that the Board continues to be very confident in investing further in the development pipeline. London has a growing economy, an excellent transport network and, given the market dynamics in the Group's operating area, there is nowhere the Board would rather be developing in the foreseeable future.
Jon Di-Stefano, Chief Executive of Telford Homes, commented: "Telford Homes is focused on relatively affordable locations in non-prime inner London where the demand for new homes from investors, tenants and owner-occupiers far exceeds the supply. The Group continues to add to its development pipeline and our recent acquisition of the regeneration business of United House Developments has resulted in an enhanced longer term strategic pipeline stretching over the next eight years. With over £685 million of forward sales secured, Telford Homes remains well on track to meet profit expectations for the year to 31 March 2016 and beyond."
For Further information:
|Telford Homes Plc|
Jon Di-Stefano, Chief Executive
Kate Rogers, Financial Director
Tel: +44 (0) 1992 809 800
|Shore Capital - Nomad and Join Broker|
|Pascal Keane / Patrick Castle||Tel: +44 (0) 20 7408 4090|
|Peel Hunt LLP - Joint Broker|
|Charles Batten / Hugh Preston||Tel: +44 (0) 20 7418 8900|
|Quincy Allan / Alex Shaw||Tel: +44 (0) 20 7398 7710|
For further information, please see www.telfordhomes.london