The Group warned that pre-tax profits for H1 2017 will be lower than last year, but in line with expectations.
“The Group’s reported profits in any given period are driven by the number of open market completions achieved and there were far fewer of these in H1 2017 than H1 2016,” a trading statement said. “This is purely down to development timings which are all on track and in accordance with the original programmes but do not always fall equally across the year. Completions of individual properties are proceeding exactly as planned with no unexpected delays.”
As a result of the weighting of completions across the year pre-tax profit for H1 2017 will be lower than last year but entirely in line with expectations, it said. The interim dividend is proposed to increase in line with the anticipated full year profit growth and will not be affected by weighting between the two half year periods.
“To date Telford Homes has secured 95 per cent of the open market homes anticipated to complete in the year to 31 March 2017 and 87 per cent of the gross profit expected in the year,” the statement said. “The Board’s expectations for the full year to 31 March 2017 and further into the future remain unchanged and the Group is on track to deliver significant growth in both output and profits over the next three years.”
Telford Homes continues to hold a positive view of both the current and future housing market in non-prime areas of London due to the significant imbalance between the supply of homes and demand for somewhere to live, the company said in a trading statement.
“This imbalance underpins the future prospects for the business and as a result the Board has not revised the Group’s growth targets following the outcome of the EU vote,” it said. “There is a housing crisis in London with many more homes needed and the Group expects to play an increasing role in delivering those homes.”
PRS remains a significant focus for the Group. “There has been a noticeable increase in institutional interest in PRS investments which complements the Group’s desire to extend its involvement in the sector and to benefit from stronger returns on equity and lower gearing as a result,” it said.
“We have seen a robust market place in recent weeks, with encouraging sales activity and increasing interest from institutional investors” Jon Di-Stefano, Chief Executive of Telford Homes, said. “We are very pleased with the progress of our move into delivering schemes for the ‘build to rent’ sector and I am delighted that we are progressing discussions on a third transaction to add to the sales already achieved to L&Q and M&G Real Estate.”
“The Group has made strong progress in the last six months and remains positive about the long term prospects for the housing market in non-prime areas of London. The imbalance between the supply of homes and the need for somewhere to live is not diminishing and this underpins our plans to continue to grow Telford Homes over the next few years.”
PHOTO CREDIT: Thomas Nugent