Trading Update (6428U)
October 20 2010 - 2:00AM
UK Regulatory
TIDMTEF
RNS Number : 6428U
Telford Homes PLC
20 October 2010
Press Release 20 October 2010
Telford Homes Plc
("Telford Homes" or the "Group")
Trading Update
Telford Homes Plc (AIM:TEF), the residential property developer
in East London noted for regeneration projects within public sector
partnerships is pleased to give the following trading update ahead
of its interim results for the six month period ended 30 September
2010 which will be released on 1 December 2010.
Highlights
-- Performance in line with expectations for the period
-- A total of 206 new sales achieved since 1 April 2010
-- 133 open market completions in the period down from
224 last year due to the Group developing a greater
proportion of affordable housing during the recession
-- Cash holdings at 30 September of GBP22.0 million (31
March 2010: GBP33.6 million) including HCA grant held
for future expenditure
-- Total borrowings of GBP67.6 million (31 March 2010:
GBP70.8 million) with new site acquisitions offset by
repayments from open market completions
-- Cautious approach to new investment maintained in the
light of continued uncertainty over the economic environment
Current market conditions
The Group has achieved 206 new sales since 1 April 2010 assisted
by successful overseas sales events. The last few weeks have seen a
continued steady rate of UK sales such that performance remains in
line with management expectations. There were 133 open market
completions in the first half of the year (H1 2009: 224) also in
line with expectations given the focus on developing more
affordable housing during the recession. Lower open market output
as well as lower margins will reduce reported profits for a period
of time but this was anticipated and the Board expects the Group to
meet market expectations in the current financial year.
The Group's secured grant programme with the Homes and
Communities Agency (HCA) continues with several sites now nearing
completion and the receipt of the final grant tranches. There are
expected to be significant cuts in the future grant programme and
the Group is not acquiring any new sites where grant funding is a
requirement of the scheme until the levels available in the future
become more certain. Telford Homes' record of delivery in its
partnership with the HCA will give the Group an excellent chance of
securing future grant allocations.
The Group has been active in land acquisition over the last six
months and has begun to exercise options over the open market sites
on some of its estate regeneration projects. In addition the Group
was presented with the opportunity to acquire the other 50% of its
joint venture with The Royal Bank of Scotland at Greenwich
Creekside, at cost with payment deferred, and this transaction was
completed on 17 September 2010. This acquisition will enhance
profits in future years.
The Group has not increased its overall level of borrowing in
the last six months although this is expected in the future when
more sites for open market homes will be purchased and developed.
Good progress is being made in negotiating a longer term corporate
banking facility and this is currently being put to the credit
committees of four banks.
Outlook
The Board remain cautious in their outlook in light of the
uncertain economic environment and an expectation that the mortgage
market will see little improvement before early 2012. However
trading conditions in East London have been steady and the Group
continues to benefit from the 2012 Olympics as a result of the
improving infrastructure and regeneration which positions the area
for long term growth. Over time the increasing shortage of new
homes will create further opportunities for significant growth and
the long term prospects for Telford Homes remain strong.
- Ends -
For further information:
Telford Homes Plc
Andrew Wiseman, Chief Executive Tel: +44 (0) 1992 809
800
Jon Di-Stefano, Financial Director www.telfordhomes.plc.uk
Shore Capital
Pascal Keane Tel: +44 (0) 20 7468
7995
Media enquiries:
Abchurch
Henry Harrison-Topham / Joanne Shears Tel: +44 (0) 20 7398
7709
joanne.shears@abchurch-group.com www.abchurch-group.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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