TIDMTEF
RNS Number : 6234G
Telford Homes PLC
31 May 2017
31 May 2017
Telford Homes Plc
("Telford Homes" or the "Group")
Final Results
Telford Homes Plc (AIM:TEF), the London focused residential
property developer, today announces its final results for the year
ended 31 March 2017.
Highlights
-- Record revenue of GBP291.9 million, an increase
of 19 per cent (2016: GBP245.6 million)
-- Pre-tax profit for the year exceeded original
market expectations increasing to GBP34.1
million (2016: GBP32.2 million)
-- On track to exceed GBP40 million of profit
before tax in the year to 31 March 2018 and
GBP50 million in the year to 31 March 2019
-- Over 80 per cent of anticipated gross profit
for the year to 31 March 2018 and over 60
per cent for March 2019 already secured
-- Proposed final dividend of 8.5 pence per
share bringing the total dividend for the
year to 15.7 pence per share (2016: 14.2
pence), an increase of just over 10 per cent
-- 99 per cent customer recommendation rate
in calendar year 2016
-- Substantial forward sales position at 1 April
2017 amounting to GBP546 million (2016: GBP579
million) underpinning growth expectations
over the next few years
-- Increased focus on build to rent with pipeline
now representing nearly 500 homes with a
combined contract value of over GBP230 million
-- Continued investment in land with three site
acquisitions in the last four months
-- Development pipeline at GBP1.5 billion of
future revenue represents more than five
times revenue reported in the year to 31
March 2017
Commenting on the Final Results, Jon Di-Stefano, Chief Executive
of Telford Homes, said: "I am delighted to report record levels of
revenue and profit for the year to 31 March 2017 and an increase in
the dividend paid to shareholders. Since the start of 2016 we have
swiftly established Telford Homes at the forefront of the London
build to rent sector with over GBP230 million of combined contract
value secured to date. Build to rent is a strategic focus for the
Group and we expect to further increase our activity in the coming
months.
Our confidence in delivering continued growth remains unchanged,
supported by the chronic need for homes in London. We are on track
to exceed GBP40 million of profit before tax for the year to 31
March 2018 and GBP50 million in the year to 31 March 2019 having
already secured over 80 per cent of the anticipated gross profit
for 2018 and over 60 per cent for 2019."
- Ends -
For further information:
Telford Homes Plc
Jon Di-Stefano, Chief Executive
Katie Rogers, Financial Tel: +44 (0) 1992
Director 809 800
Guy Lambert, Head of Corporate www.telfordhomes-ir.london
Communications
Shore Capital (Nomad and
Joint Broker)
Dru Danford / Patrick Castle Tel: +44 (0) 20
7408 4090
Peel Hunt LLP - Joint Broker
Charles Batten / Capel Irwin Tel: +44 (0) 20
7418 8900
Media enquiries:
Buchanan
Henry Harrison-Topham / Tel: +44 (0) 20
Vicky Hayns / 7466 5000
Steph Watson
telfordhomes@buchanan.uk.com www.buchanan.uk.com
Copies of this announcement are available from the Group at
Telford House, Queensgate, Britannia Road, Waltham Cross,
Hertfordshire EN8 7TF and on our website
www.telfordhomes-ir.london.
CHAIRMAN'S STATEMENT
We are well positioned to continue the growth of Telford Homes
thanks to the strength of our performance in the undersupplied
non-prime London housing market and our increasing activity in the
build to rent sector.
Performance
Notwithstanding some uncertainty created by the outcome of the
EU referendum we have experienced robust demand for our homes from
individual investors and owner occupiers. Our ability to deliver
forward sold homes to our customers on programme, together with a
step change in our presence in the build to rent sector, saw
Telford Homes achieving excellent results for the year to 31 March
2017. I am particularly pleased that we achieved a 99 per cent
customer recommendation rate in 2016, a notable endorsement of our
commitment to quality and service.
Since February 2016 we have exchanged contracts on four
significant build to rent transactions with a range of investors,
indicative of our growing reputation in the sector as a trusted
delivery partner. Along with monitoring external influences on the
Group, the development of our build to rent strategy has been one
of the principal areas of focus for the Board this year. This
sector complements our historic focus on individual sales to
investors and owner occupiers and is well aligned with our forward
selling philosophy. The attractive return on capital and lower risk
profile associated with build to rent will facilitate accelerated
growth for Telford Homes, although the Board remains mindful of
ensuring the business grows in a controlled manner in order that
our high standards of operational performance are upheld.
Dividend
The Board is pleased to declare a final dividend of 8.5 pence
per share, making a total of 15.7 pence per share for the year, an
increase of just over 10 per cent compared with the previous year
(2016: 14.2 pence). Our policy is to pay one third of earnings as
dividends in each financial year. For the year to 31 March 2017
however, the Board has fulfilled its promise to increase the
dividend payment above that level in order to offset the dilution
in earnings resulting from the equity placing in late 2015.
Therefore, the interim dividend together with the full year
dividend equates to over 40 per cent of earnings for this financial
year. The final dividend will be paid on 14 July 2017 to those
shareholders on the register at the close of business on 16 June
2017. The ex-dividend date is therefore 15 June 2017.
Culture and values
I have always been proud of the single team culture and strong
values of Telford Homes. In the last year we have recruited
talented people from outside of the business at levels not seen
previously. As Telford Homes continues to grow and our strategy
evolves, there is a need to ensure that the culture that has made
the business so successful to date is preserved, yet able to adapt
to the requirements of a larger organisation. For this reason, the
Group plans to review its corporate vision, mission and values
during 2017 to ensure these reflect the evolving position of the
business and allow us to capitalise on the opportunities that lie
ahead.
In a year that has seen strong operational growth, our admirable
health and safety record merits mention. Health and safety is the
first item on the agenda at monthly Board meetings and our
performance is testament to the sound policies and procedures in
place, as well as the deep-rooted sense of responsibility that
pervades the organisation.
Another core principle in our approach is the emphasis placed
upon sustainability. Although this has been a consideration in the
Group's way of operating for some years, following the appointment
in 2016 of a Head of Sustainability, the philosophy has been
formalised into our 'Building a Living Legacy' strategy. A number
of core targets have been established within this strategy and we
are committed to achieving these in the coming years.
Outlook
I am delighted to be able to look back on another excellent
year, and, on behalf of the Board, I wish to thank all our
employees for their hard work in delivering these results. I am
excited by the strength of our development pipeline and the
promising opportunities that lie ahead for Telford Homes to play an
increasing role in meeting the need for new homes in London.
Andrew Wiseman
Chairman
30 May 2017
CHIEF EXECUTIVE'S REVIEW
In addition to strong financial results for the year to 31 March
2017, our growing reputation as a build to rent partner is
unlocking an exciting source of future growth.
Performance
I am delighted to report record levels of revenue and profit for
the year to 31 March 2017. Pre-tax profits continued to increase,
reaching GBP34.1 million (2016: GBP32.2 million), slightly ahead of
the level anticipated at the beginning of the year due to more open
market completions in the second half of the year and additional
build to rent profit recognition. The gross margin before interest
charges of 22.3 per cent and the operating margin before interest
of 13.4 per cent were in line with expectations. Both reflect the
increasing mix between developments sold to individual buyers and
build to rent transactions secured at lower margins in exchange for
enhanced capital returns.
Despite uncertainty in relation to the outcome of the EU
referendum and tax changes impacting primarily UK based individual
investors, our underlying market has remained resilient. Any
potential dampening effect of these factors has been outweighed by
the structural imbalance between supply and need for new homes in
London, particularly at our typical price point.
Our forward selling strategy continues to be at the heart of our
model. We sell homes early in the development cycle as a means of
de-risking projects and advancing investment into new
opportunities. This means that trading activity undertaken in each
financial year will typically deliver revenue and profit over the
following two to three years, giving the Board substantial
visibility over future profit levels and expected cash flows. We
receive deposits when contracts are exchanged for individual
properties and, as at 31 March 2017, GBP68.1 million of deposits
had been taken in advance of future completions. This additional
funding supports further investment in the development pipeline and
reduces the need to draw down debt finance. We start the financial
year with a substantial order book of forward sales of GBP546
million (1 April 2016: GBP579 million). This secure and de-risked
position is underpinning our stated expectations for growth over
the next few years.
Following some recent land acquisitions our development pipeline
stands at GBP1.5 billion of future revenue and represents more than
five times the revenue generated in the year to 31 March 2017. The
average anticipated price of the open market homes within the
pipeline is GBP527,000 (2016: GBP513,000). This is in line with our
model of seeking non-prime opportunities where the average sales
price is below GBP1,000 per square foot, and hence the majority of
homes are priced between GBP350,000 and GBP700,000.
In February 2017, we added to the pipeline with the acquisition
of a sizeable development site, the former London Electricity Board
('LEB') building on Cambridge Heath Road, E2 for GBP30.2 million.
The anticipated gross development value of the site is
approximately GBP95.0 million. Subject to planning consent, we
expect to start work on site in 2018 and to finish in 2021. Post
year end we have exchanged contracts to acquire Stone Studios in
Hackney Wick for 120 homes plus commercial space, and been selected
as the preferred partner of the London Borough of Brent to develop
236 homes in South Kilburn. Both sites have full planning consent
and we expect to start on site later this year.
Customer mix
The Group's customer mix for the year to 31 March 2017 has moved
significantly towards institutional build to rent investors, with
this sector representing 77 per cent of sales generated (2016: 24
per cent) compared with individual investors from the UK and
overseas at 20 per cent (2016: 69 per cent) and owner-occupiers at
three per cent (2016: seven per cent). In total, including build to
rent transactions, we exchanged contracts for the sale of 501 open
market properties in the year to 31 March 2017 (2016: 463).
Individual open market sales
As our build to rent business has grown, and we have continued
to pursue our forward sales strategy, we have naturally seen lower
numbers of sales to owner-occupiers. Unless they are cash buyers,
owner-occupiers are typically unable to purchase more than six
months ahead of completion. However, there is clearly significant
demand from this part of the market and over the last few weeks we
have had a very encouraging response to the launch of the residual
availability at Bermondsey Works leading to 22 owner-occupier
reservations, 20 of which are being purchased under the
Government's Help to Buy scheme.
We have seen robust demand from individual investors underpinned
by a thriving rental market primarily caused by an imbalance
between supply and demand for rental properties at the right price
point. Amongst these sales it is pleasing to see a number of repeat
purchasers, who often opt to wait for the launch of the next
Telford Homes development rather than investing elsewhere. In the
2016 calendar year, we achieved a 99 per cent customer
recommendation rate, an outstanding performance that sustains the
high levels achieved in previous years (2015: 99 per cent).
Our last significant launch to individual investors was the
second phase of City North, Finsbury Park, in November 2016, which
secured 73 new sales for a combined value of over GBP43 million.
The success of this is evidence that high quality homes in
desirable locations remain sought after by investors across the
world. Subsequent to City North, developments that could have been
more widely launched for sale have instead been sold to build to
rent investors as part of our new strategic focus. Notwithstanding
this we are confident that there remains a healthy market for our
typical product from individual buyers.
Build to rent
We have increased our presence in the London build to rent
sector over the last year. Since February 2016 we have entered into
four build to rent transactions comprising nearly 500 homes,
together worth over GBP230 million. Telford Homes is a valued
partner to large-scale investors, given our record in delivering
complex residential projects, and we are proud to have become
recognised as a significant build to rent developer in such a short
space of time.
In December 2016, we exchanged contracts for the sale of The
Forge, Redclyffe Road, E6 to M&G Real Estate. The sale
consisted of the freehold interest in the land and construction of
125 homes for a net consideration of GBP48.6 million. This was our
third build to rent transaction, and the second with M&G. At
the end of March 2017 our joint venture, Chobham Farm North LLP,
exchanged contracts on our fourth significant build to rent
transaction. Contracts were exchanged for the sale of 112 of the
297 open market homes at New Garden Quarter, Stratford E15 for a
net consideration of GBP53.7 million. The sale, to a subsidiary of
our joint venture partner Notting Hill Housing Group, was for the
first phase of open market homes at this development and removed
the need for third party debt finance.
As we have previously reported we are actively looking into
establishing longer term relationships with build to rent
investors. We anticipate that this type of partnership will enable
Telford Homes to buy land with a secured build to rent sale already
in place subject to any planning requirements. This will bring
focus to our acquisition of build to rent opportunities allowing us
to move swiftly to secure sites and to take advantage of an
increased desire for purpose built rental homes from local councils
and the Mayor of London.
Market context
The principal market developments in the year have been a level
of nervousness created by the outcome of the EU referendum and tax
changes, namely the three per cent stamp duty surcharge on second
properties and the phased removal of tax relief on mortgage
interest. The potentially negative impact of these factors on our
performance has been mitigated by the chronic imbalance between the
supply of and need for homes in London. Our business model of
developing homes that people can afford to either buy or rent is
built upon this fundamental and longstanding driver of demand.
Although the EU referendum result created a degree of
uncertainty, this has not to date been a significant cause for
concern for the Group. We chose to defer launches for a short
period while the immediate furore died down, something that our
focus on forward selling allows us the flexibility to do. Demand
remained buoyant however and neither have we seen significant
pressure on labour availability or materials due to the result
especially as there has not been a dramatic increase in the supply
of homes in London. We will continue to monitor the negotiations
with the EU looking for stability throughout the process and
assurances as soon as possible on the rights of EU workers to
remain in the UK. We consider that these are already vital
considerations for both sides, which supports our confidence in
continuing with our current strategy for growth.
The shift of our business model towards build to rent has helped
to cushion us from the impact of the tax changes. In any case sales
to overseas investors have remained robust, evidenced by the
launches of the Liberty Building just over a year ago and more
recently City North. We have seen particular success over the last
three years in selling to investors based in China. This is despite
any potential tempering of demand in relation to leaving the EU or
the additional three per cent stamp duty, both of which have been
offset for some buyers by favourable movements in exchange
rates.
We have, however, seen a reduction in the number of UK based
individuals seeking to invest in buy-to-let properties. These
investors have been more sensitive than overseas buyers to the
uncertainty resulting from the EU referendum, and have also been
deterred by the increase in stamp duty and the reducing ability to
benefit from tax relief on mortgage interest. Despite these tax
changes the attractive rental yields that are bringing
institutional investors into the market should also encourage
individuals to invest again once their confidence returns.
Objectives and strategy
Our primary objective is to build more homes in London and to
grow in a controlled manner to meet some of the shortfall between
supply and need in the capital. We are on track to achieve our
stated ambition to generate significant growth in pre-tax profits
over the next two years, and also to create a platform for
sustaining a bigger business that can continue to grow in the
longer term.
Our strategic priority is to further increase our activity in
the build to rent sector. Our business is very capital intensive
and this restricts our rate of growth if we are relying on our own
sources of capital. A key attraction of build to rent is that
forward funded developments do not require much, if any, of our
equity, nor any debt finance. This allows us to accelerate the
growth of the business, provided we have the operational capacity
to do so, and to combine that with reducing our longer term
reliance on debt.
As well as the focus on increasing our presence in build to
rent, we are expanding our geographical reach beyond our historical
heartland of boroughs in the East of London. We still expect to
operate in our key boroughs, but as the business grows in scale we
are looking to broaden the spread of individual sale and build to
rent opportunities. An example of this in action is the South
Kilburn site in partnership with Brent, a borough in which we have
not previously developed. We believe our skillset can be deployed
to develop homes across London, maintaining a strong pipeline of
developments for individual buyers in non-prime locations and for
build to rent investors.
Another decision that has resulted from our increased scale is
to target larger sites, typically of 50 or more units, in order to
secure economies of scale. This also fits with the minimum scale of
investment for most build to rent investors and ensures we are not
spending time on smaller sites that historically contribute much
less to profits and disproportionately take up operational
capacity.
Having a solid foundation of forward sold properties now allows
us the flexibility to hold back some open market homes until later
in the development time frame, should we wish to take advantage of
an active owner occupier market, supported in some instances by
Help to Buy. We have seen recent success with Help to Buy at
Bermondsey Works, having held back the residual availability with
that objective. We do not expect Help to Buy to become as
fundamental to Telford Homes as it is to many other developers, but
it will help us to maintain support for those who still wish to
purchase their own home.
We are planning dedicated sales centres on more of our sites,
working together with our central sales location in Stratford. In
these instances, including at Bow Garden Square, St Pauls Way, E3
and the remainder of New Garden Quarter, we will be commencing
sales much later in the development process than would normally be
the case. We expect this to bring a healthy balance to our overall
sales mix ensuring that we are able to flexibly adjust to any
future demand changes across our various customer segments.
In the last twelve months we have taken a big step forward in
terms of our commitment to sustainability. We now have a Head of
Sustainability and a fully-fledged strategy, 'Building a Living
Legacy', including a commitment to achieving a range of targets
over the next seven years. These targets address economic, social
and environmental aspects of building a sustainable business for
the benefit of all our stakeholders.
Ever mindful of needing to work as efficiently as possible, we
have increased our adoption of modern methods of construction to
speed up the delivery of certain developments, something the
government has been encouraging the sector to do. Not only is this
beneficial to our customers and investors but it also improves our
return on capital. Examples include the off-site construction of
brick cladding at our Manhattan Plaza development and the use of a
lightweight metal frame structure at The Pavilions, one of our
build to rent schemes. Along with the rest of the industry, we will
be looking at how we can increase the use of these methods and
others to deliver homes more quickly and efficiently.
Outlook
We anticipate that the lack of supply of new homes relative to
need in non-prime areas of London will continue to provide ample
opportunity for the growth of Telford Homes in the foreseeable
future. Our increased focus on build to rent, with de-risked sales
requiring reduced levels of equity and no debt finance, allows us
to evaluate ways to grow at a faster rate. Although build to rent
projects generate a moderately lower net margin, our return on
capital is much improved and longer term debt requirements will be
lower.
We expect to continue our successes in the build to rent sector
due to the increasing appetite of a range of potential investors.
In particular, we will pursue longer term partnerships whilst also
maintaining an awareness of other opportunities. We anticipate that
over the next few years build to rent could represent as much as
half of our total revenue pipeline.
The Board is comfortable with the development pipeline, and we
have avoided acquiring land at inflated prices. We have equity and
debt available to add to the pipeline, and will do this where
opportunities are consistent with our strategy and meet our
financial hurdles. Prospects spanning a variety of locations are
being evaluated on an ongoing basis and in greater numbers than in
2016. This, together with the successful tenders for our recent
acquisitions, is encouraging in terms of securing access to our
most important raw material.
We are confident in our product and market place as we look to
the future. Over 80 per cent of the anticipated gross profit for
the year to 31 March 2018 has been secured, and Telford Homes is on
track to deliver over GBP40 million of profit before tax. In
addition, for the year to 31 March 2019, we have secured over 60
per cent of the anticipated gross profit and expect profit before
tax to exceed GBP50 million.
The strength of our performance and outlook are testament to the
hard work and commitment of everyone at Telford Homes. I am proud
of our way of working, our exemplary rate of employee retention and
our excellent health and safety record and all the more so in view
of the exceptional growth we have achieved in the last few years. I
want to thank everyone that makes Telford Homes a special place to
work and I look forward to another exciting period of growth
ahead.
Jon Di-Stefano
Chief Executive
30 May 2017
FINANCIAL REVIEW
Telford Homes has experienced another year of excellent results
achieving growth in profit before tax for the fifth year running
from GBP3 million in 2012 to just over GBP34 million this year. The
Group has seen success in forward selling homes through traditional
channels but has also increased its focus and prominence in the
London build to rent sector entering into three more build to rent
contracts in the year. The Group has continued to invest in land
and work in progress but still has substantial headroom within its
GBP180 million revolving credit facility available to achieve its
aspirations of increasing profit to over GBP50 million by March
2019.
Presentation of joint ventures
In the year to 31 March 2015 the Group adopted IFRS 11 'Joint
Arrangements' which states that joint ventures should be accounted
for as equity investments rather than by proportional
consolidation. The Group's joint ventures are an integral part of
the business and as such the Board believes that the financial
results are most appropriately presented using proportional
consolidation which means including the relevant share of the
results of joint ventures in each line of the income statement and
balance sheet. This therefore remains the method of presentation
within the Group's internal management accounts.
The Board has prepared an income statement and a balance sheet
using proportional consolidation along with Generally Accepted
Accounting Principles (GAAP) compliant versions presenting joint
ventures as equity investments. The key performance indicators and
other figures within this report include the Group's share of joint
venture results. The Board suggests investors follow its lead in
assessing the business on the results that include a proportional
share of joint ventures.
Operating results
Revenue, including the Group's share of joint ventures, has
increased to a record GBP291.9 million (2016: GBP245.6 million), up
18.9 per cent on the prior year. On a Generally Accepted Accounting
Principles (GAAP) basis, excluding the Group's share of joint
ventures, revenue increased to GBP266.0 million (2016: GBP242.7
million).
The number of open market residential completions was lower than
the prior year at 289 (2016: 482) however the average selling price
was higher at GBP531,000 (2016: GBP417,000). The reduction in
completions is purely down to availability of finished stock with
fewer units physically available to handover in the current
financial year. Similarly, the increase in average price is a
function of the mix of developments completing in each year in
terms of product and their location together with relatively modest
sales price inflation.
The reduction in revenue from open market completions was more
than offset by an increase in both subsidised affordable housing
revenue and build to rent revenue recognised in the year. In the
year to 31 March 2017, the Group exchanged contracts to deliver 400
affordable homes (2016: 87 homes) and entered into three new build
to rent contracts to deliver 387 build to rent homes (2016: 156
homes) over the next few years.
The Group continues to recognise revenue from the sale of
affordable homes and build to rent homes under contract accounting
on a percentage of completion basis throughout the build programme.
Revenue recognised from affordable housing was GBP50.1 million
(2016: GBP19.1 million) and from build to rent contracts was
GBP76.5 million (2016: GBP19.9 million). This includes the new
contracts exchanged during the year together with the ongoing
profit recognition on contracts exchanged in previous years.
The increased focus on build to rent will, over time, result in
a greater proportion of the Group's revenue and profit being
recognised on a percentage of completion basis over the life of the
development as opposed to individual open market sales where
revenue and profit which is recognised at the point of legal
completion. Build to rent sales can therefore result in the Group
recognising revenue and profit earlier than if the homes had been
sold to individual purchasers.
A further advantage of build to rent sales is that they are
forward funded by the investors and therefore they offer
exceptional returns on capital. Forward funding broadly means an
initial payment reimbursing the cost of the land followed by
monthly construction payments and finally a payment on completion.
As such very little, if any, equity is used during construction and
no debt is required. In return for these benefits the Group is
accepting a moderately reduced net margin on build to rent
contracts with a lower sale price being partly offset by savings in
selling expenses and interest costs.
During the year to 31 March 2017, the Group sold one small
undeveloped site for GBP5.0 million. Similar to the two sites sold
in the prior year for a total of GBP6.7 million, this sale is a
result of a change in strategic direction where smaller sites have
become less attractive to build out and the Group is able to
leverage its greater operational size to focus on larger scale
developments. The Group has also continued its programme of
disposing of older freehold assets generating revenue of GBP4.9
million (2016: GBP1.7 million).
Gross profit has increased to GBP63.2 million from GBP63.1
million including the Group's share of joint ventures. Gross profit
is stated after expensing loan interest that has been capitalised
within inventories of GBP1.9 million (2016: GBP1.9 million) and,
before charging this interest, the gross margin was 22.3 per cent
compared to 26.5 per cent last year.
The decrease in gross profit margin was as expected with two
main reasons for the reduction. Firstly, the margin achieved on
open market sale completions of 25.4 per cent was lower than that
achieved last year (2016: 27.3 per cent) but slightly ahead of the
Group's target when appraising new sites of 24 per cent. The margin
recognised on open market homes is expected to trend down towards
the target margin over time as older developments which benefitted
from more significant sales price inflation and minimal build cost
inflation are replaced with sites appraised more recently.
Secondly, a greater proportion of the revenue this year is
generated from build to rent contracts which attract a lower gross
margin to compensate for the advantages of being forward funded and
for savings in selling expenses and interest costs. The Group
expects build to rent transactions to achieve a gross margin of
approximately 12 to 13 per cent which represents the normal target
margin of 24 per cent less savings in selling expenses and interest
costs of circa 8 eight per cent and therefore a net difference of
up to four per cent offset by a substantially improved return on
capital. The margin achieved on the build to rent revenue
recognised in the year to 31 March 2017 was well ahead of that
target at 16.0 per cent due to some of the land being purchased at
more advantageous rates prior to becoming part of the build to rent
portfolio. Future build to rent margins are still expected to be
around 12 to 13 per cent.
Administrative expenses have increased to GBP20.8 million (2016:
GBP19.3 million) including the Group's share of joint ventures and
GBP20.7 million excluding joint ventures (2016: GBP19.1 million).
This increase is mainly due to higher employee costs as the Group
continues to recruit and reward the talent required to establish a
structure appropriate for growth. As a percentage of revenue
administrative expenses remain consistent year on year at circa
seven per cent.
Selling expenses have reduced significantly to GBP5.1 million
(2016: GBP9.4 million) including the Group's share of joint
ventures and GBP4.1 million excluding the Group's share of joint
ventures (2016: GBP9.2 million). This reduction is partly due to
the lower number of open market completions but also reflects the
Group's move towards build to rent which has reduced the number of
homes available to sell on the open market. During the year, there
was only one significant launch, City North, incurring selling
expenses of GBP0.9 million, compared to three launches in the
previous year which resulted in combined selling expenses of GBP4.5
million. The homes sold under the three build to rent contracts
entered into during the year would previously have been anticipated
to be sold on the open market at some point over the next few years
and therefore the build to rent transactions will generate
significant sales cost savings over the same period.
The Group's operating margin, calculated before interest and the
costs associated with the United House acquisition in the prior
year, reduced to 13.4 per cent (2016: 15.0 per cent). This
reduction is due to the increased proportion of build to rent
profit this year which also generates interest cost savings below
the operating margin line.
Profit before tax including the Group's share of joint ventures
has increased to a record high of GBP34.1 million from GBP32.2
million and to GBP34.6 million excluding the Group's share of joint
ventures (2016: GBP32.3 million). The Board expects the year to 31
March 2018 to show significant growth in pre-tax profits and again
in the following year. A large proportion of this growth is already
visible due to the scale of the development pipeline and the
Group's substantial forward sold position.
Finance costs
Finance costs actually incurred in the year, including the
Group's share of joint ventures increased to GBP5.3 million (2016:
GBP4.5 million) and reduced to GBP4.3 million excluding the Group's
share of joint ventures (2016: GBP4.4 million)
Average borrowings in the year were higher at GBP55.1 million
(2016: GBP50.6 million) with the interest charged on these
borrowings of GBP2.2 million (2016: GBP2.2 million) being
capitalised into work in progress as required by IAS 23.
Finance costs charged directly to the income statement primarily
consist of amortised arrangement fees and non-utilisation fees on
the Group's GBP180 million revolving credit facility and the new
GBP110 million facility with LaSalle Residential Finance Fund
secured in July 2016 to fund our joint venture scheme, City North.
Non-utilisation fees including our share of joint ventures have
increased to GBP2.5 million (2016: GBP1.7 million) of which GBP1.6
million is attributable to the revolving credit facility (2016:
GBP1.7 million) and GBP0.9 million to the City North facility
(2016: GBPnil).
Dividend
The Board's policy is to pay one third of earnings as dividends.
Following the equity placing concluded in November 2015 the Board
committed to paying a dividend equivalent to one third of earnings
adjusted to remove the dilutive effect of the new shares for both
the year to 31 March 2016 and the year to 31 March 2017. As a
result, a final dividend of 8.5 pence per share has been proposed.
Together with the 7.2 pence interim dividend paid on 6 January 2017
this makes the total dividend for the year 15.7 pence (2016: 14.2
pence). This equates to just over 40 per cent of earnings and
delivers a yield of circa four per cent based on the share price at
31 March 2017. The final dividend is expected to be paid on 14 July
2017 to those shareholders on the register at the close of business
on 16 June 2017.
Despite an increase in profit after tax, earnings per share has
decreased from 39.3 pence to 36.8 pence. This is due to the equity
placing which increased the number of shares in issue throughout
the year to 31 March 2017 but only for part of the previous year
thereby increasing the weighted average number of shares in issue
year on year.
Balance sheet and cash
Net assets at 31 March 2017 were GBP204.3 million, increased
from GBP187.0 million last year mainly due to retained profits.
This equates to net assets per share of 271.3 pence (31 March 2016:
249.8 pence). There has been a significant amount of investment in
land and work in progress with inventories, including the Group's
share of joint ventures, increasing from GBP285.6 million to
GBP339.4 million. Excluding joint ventures inventories increased
from GBP239.0 million to GBP287.7 million with the balance being
recorded within investments in joint ventures.
Investment in joint ventures has increased from GBP42.1 million
to GBP47.6 million. The increase is mainly a result of completing
on the purchase of Gallions Quarter during the year. This is a
joint venture with Notting Hill Housing Group and was part of the
acquisition of the regeneration business of United House
Developments in September 2015. Completion on this site was
conditional on the satisfaction of certain conditions which were
concluded on 28 July 2016.
The majority of the inventories balance is land and work in
progress with minimal finished stock units due to our successful
forward sales strategy. The Group does not typically land bank
sites and therefore the vast majority of land held within
inventories is under construction or is being progressed through
the planning system. Included within inventories is GBP4.3 million
of freehold assets held for future resale (2016: GBP5.7
million).
Land creditors, including the Group's share of joint ventures
are GBP28.4 million (2016: GBPnil) and GBP26.9 million (2016:
GBPnil) excluding joint ventures. Included within land creditors is
GBP26.9 million in relation to a development site on Cambridge
Heath Road, E2 where the Group has exchanged contracts with
completion due upon vacant possession of the site expected in the
next few months. The remaining land creditors relate to our share
of the land payment for two of our joint venture sites, Balfron
Tower GBP0.3 million and Gallions Quarter GBP1.1 million where the
original land contracts include a deferred land payment
mechanism.
The Group continues to secure forward sales and benefit from the
deposits received in advance of those sales completing. The Group
had secured GBP546 million in forward sales at 1 April 2017 which
will be recognised in future years. This is comprised of GBP397
million in relation to individual open market contracts, GBP40
million of affordable housing revenue and GBP109 million of build
to rent revenue.
Total deposits received in advance on the open market contracts
secured as at 31 March 2017 reduced slightly to GBP68.1 million
(2016: GBP70.3 million). Non-refundable deposits are paid on
exchange of contracts with a minimum 10 per cent received at that
point and, where the Group is selling well ahead of completion, a
further 10 per cent is paid 12 months after exchange. The full
amount of any deposit paid is released to the Group to invest in
the business.
Borrowings
The Group continues to fund its development costs through a
combination of debt and equity and, despite significant investment
in land and work in progress, net debt has reduced to GBP14.3
million (2016: GBP17.3 million). This is partly due to open market
completion proceeds received during the year, but also deposits and
upfront payments received on forward sales including build to rent
contracts.
As a result, gearing has decreased to 7.0 per cent (March 2016:
9.3 per cent) and remains at a very low level for the Group.
Gearing is anticipated to increase to enable the significant growth
expected over the next few years. The rate of increase will depend
on the timing of future land purchases and how much the business
moves towards a build to rent model. The Board is comfortable with
the potential for increased levels of debt and gearing given that
many of the Group's developments have been substantially de-risked
by the level of forward sales secured.
Telford Homes has a GBP180 million revolving credit facility
which is available to fund developments that are not joint
ventures. This facility, from a club of four banks, runs until
March 2019 and is governed by standard corporate covenants together
with site covenants on a portfolio basis. The margin payable on
this facility varies from 2.8 per cent to 4 per cent over LIBOR
depending on gearing. The Group has benefited from low gearing
levels throughout the year and therefore the margin paid has been
at the lower end of the range. As at 31 March 2017, the Group had
drawn GBP55 million (2016: GBP40 million) of this facility leaving
headroom of GBP135 million to fund future site acquisitions and
construction costs.
Joint venture developments are funded outside of the revolving
credit facility with site specific loans secured as and when
required. In July 2016, the Group secured a GBP110 million facility
with LaSalle Residential Finance Fund to fund its 50 per cent owned
joint venture at City North and, in February 2017, it signed a
GBP33 million facility with Williams and Glyn to fund Balfron Tower
in which the Group has a 25 per cent stake. The Group's joint
venture with Notting Hill Housing Group at New Garden Quarter is
not expected to require any external debt finance due to a
proportion of the development being sold for build to rent.
The Group has excellent long term relationships and is well
supported by the banks that fund the revolving credit facility. The
Board is pleased to have added to these relationships with the new
institutions involved in the facilities signed during the year.
Telford Homes is in a strong financial position with significant
headroom within existing debt facilities and equity available to
enable the growth targeted over the next few years.
Katie Rogers
Group Financial Director
30 May 2017
GROUP INCOME STATEMENT INCLUDING PROPORTIONAL SHARE OF JOINT
VENTURE RESULTS FOR THE YEARED 31 MARCH 2017
Non-GAAP Non-GAAP
Year Year
ended ended
31 March 31 March
2017 2016
GBP000 GBP000
---------- ----------
Revenue 291,921 245,581
Cost of sales (228,720) (182,438)
Gross profit 63,201 63,143
Administrative expenses (20,805) (19,250)
Selling expenses (5,091) (9,365)
Operating profit 37,305 34,528
Finance income 160 153
Finance costs (3,337) (2,478)
Profit before income
tax 34,128 32,203
Income tax expense (6,609) (6,477)
Profit after income
tax 27,519 25,726
---------- ----------
GROUP BALANCE SHEET INCLUDING PROPORTIONAL SHARE OF JOINT
VENTURE RESULTS AT 31 MARCH 2017
Non-GAAP Non-GAAP
31 March 31 March
2017 2016
GBP000 GBP000
---------- ----------
Non current assets
Goodwill 818 383
Property, plant and
equipment 1,272 1,485
Trade and other receivables 100 -
Deferred income tax
assets - 230
---------- ----------
2,190 2,098
Current assets
Inventories 339,380 285,610
Trade and other receivables 42,893 31,362
Cash and cash equivalents 39,834 20,856
---------- ----------
422,107 337,828
Total assets 424,297 339,926
Non current liabilities
Trade and other payables (1,527) (1,358)
Financial liabilities (1,096) (661)
Deferred income tax
liabilities (194) -
---------- ----------
(2,817) (2,019)
Current liabilities
Trade and other payables (159,878) (109,363)
Borrowings (54,085) (38,182)
Financial liabilities - (194)
Current income tax
liabilities (3,232) (3,198)
(217,195) (150,937)
Total liabilities (220,012) (152,956)
Net assets 204,285 186,970
---------- ----------
Capital and reserves
Issued share capital 7,529 7,485
Share premium 107,395 106,423
Retained earnings 89,361 73,062
Total equity 204,285 186,970
---------- ----------
GROUP INCOME STATEMENT
FOR THE YEARED 31 MARCH 2017
Year Year
Ended Ended
31 March 31 March
Note 2017 2016
GBP000 GBP000
---------- ----------
Total revenue 291,921 245,581
Less share of revenue
from joint ventures (25,946) (2,902)
Group revenue 265,975 242,679
-------------------------- ------ ---------- ----------
Cost of sales (208,966) (180,869)
Gross profit 57,009 61,810
Administrative expenses (20,727) (19,056)
Selling expenses (4,143) (9,177)
Share of results
of joint ventures 4,634 965
Operating profit 36,773 34,542
Finance income 90 117
Finance costs (2,231) (2,344)
Profit before income
tax 34,632 32,315
Income tax expense 3 (7,113) (6,589)
Profit after income
tax 27,519 25,726
---------- ----------
Earnings per share:
Basic 5 36.8p 39.3p
Diluted 5 36.6p 38.9p
---------- ----------
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 MARCH 2017
Year ended Year ended
31 March 31 March
2017 2016
GBP000 GBP000
----------- -----------
Movement in derivative
financial instruments
hedged (241) (466)
Movement in deferred
tax on derivative financial
instruments hedged 37 93
Other comprehensive
expense net of tax
(items that may be
subsequently reclassified
into profit or loss) (204) (373)
Profit for the year 27,519 25,726
Total comprehensive
income for the year 27,315 25,353
----------- -----------
GROUP BALANCE SHEET
AT 31 MARCH 2017
31 March 31 March
2017 2016
GBP000 GBP000
---------- ----------
Non current assets
Goodwill 289 304
Investment in joint
ventures 47,554 42,101
Property, plant and
equipment 1,272 1,485
Trade and other receivables 100 -
Deferred income tax
assets - 190
---------- ----------
49,215 44,080
Current assets
Inventories 287,652 238,976
Trade and other receivables 38,288 31,662
Cash and cash equivalents 38,629 20,709
---------- ----------
364,569 291,347
Total assets 413,784 335,427
Non current liabilities
Trade and other payables (1,527) (1,358)
Financial liabilities (1,096) (661)
Deferred income tax
liabilities (323) -
---------- ----------
(2,946) (2,019)
Current liabilities
Trade and other payables (149,516) (104,871)
Borrowings (53,805) (38,182)
Financial liabilities - (194)
Current income tax
liabilities (3,232) (3,191)
(206,553) (146,438)
Total liabilities (209,499) (148,457)
Net assets 204,285 186,970
---------- ----------
Capital and reserves
Issued share capital 7,529 7,485
Share premium 107,395 106,423
Retained earnings 89,361 73,062
Total equity 204,285 186,970
---------- ----------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2017
Share Share Retained Total
capital premium earnings equity
GBP000 GBP000 GBP000 GBP000
--------- --------- ---------- ---------
Balance at 1
April 2015 6,025 58,551 55,812 120,388
Profit for the
year - - 25,726 25,726
Total other comprehensive
expense - - (373) (373)
Movement in excess
tax on share
options - - (75) (75)
Dividend on equity
shares - - (8,443) (8,443)
Proceeds of equity
share issues 1,460 47,872 - 49,332
Share-based payments - - 218 218
Purchase of own
shares - - (598) (598)
Sale of own shares - - 795 795
Balance at 31
March 2016 7,485 106,423 73,062 186,970
Profit for the
year - - 27,519 27,519
Total other comprehensive
expense
Movement in excess - - (204) (204)
tax on share
options - - (5) (5)
Dividend on equity
shares - - (11,135) (11,135)
Proceeds of equity
share issues 44 972 - 1,016
Share-based payments - - 255 255
Purchase of own
shares - - (860) (860)
Sale of own shares - - 729 729
Balance at 31
March 2017 7,529 107,395 89,361 204,285
--------- --------- ---------- ---------
GROUP CASH FLOW STATEMENT
FOR THE YEARED 31 MARCH 2017
Year Year
ended ended
31 March 31 March
2017 2016
GBP000 GBP000
--------- ----------
Cash flow from operating activities
Operating profit 36,773 34,542
Depreciation 599 610
Write down in value of
own shares 255 218
Profit on sale of tangible
assets (20) (44)
(Increase) decrease in
inventories (46,525) 17,914
Increase in receivables (6,726) (19,969)
Increase in payables 44,953 11,499
Share of results from
joint ventures (4,634) (965)
--------- ----------
24,675 43,805
Interest paid and debt
issue costs (3,898) (4,017)
Income taxes paid (6,511) (5,468)
--------- ----------
Cash flow from operating
activities 14,266 34,320
--------- ----------
Cash flow from investing
activities
Distribution from joint
ventures 12,045 5,750
Investment in joint ventures (9,308) (25,638)
Purchase of tangible assets (387) (1,067)
Proceeds from sale of
tangible assets 20 44
Consideration paid for
business combination (3,556) (18,562)
Interest received 90 117
--------- ----------
Cash flow from investing
activities (1,096) (39,356)
--------- ----------
Cash flow from financing
activities
Proceeds from issuance
of ordinary share capital 1,016 49,332
Purchase of own shares (860) (598)
Sale of own shares 729 795
Increase in bank loans 15,000 -
Repayment of bank loans - (55,000)
Dividend paid (11,135) (8,443)
Cash flow from financing
activities 4,750 (13,914)
--------- ----------
Net increase (decrease)
in cash and cash equivalents 17,920 (18,950)
Cash and cash equivalents
brought forward 20,709 39,659
--------- ----------
Cash and cash equivalents
carried forward 38,629 20,709
--------- ----------
NOTES
1 Basis of preparation
The financial information set out above does not constitute
statutory accounts for the years ended 31 March 2017 and 31 March
2016 but is derived from those accounts. Statutory accounts for the
year ended 31 March 2016 have been delivered to the Registrar of
Companies and the statutory accounts for the year ended 31 March
2017 will be delivered to the Registrar of Companies and sent to
all shareholders shortly. The auditors have reported on those
accounts; their reports were unqualified, did not draw attention to
any matters by way of emphasis without qualifying their report and
did not contain statements under Section 498 (2) or (3) of the
Companies Act 2006 or equivalent preceding legislation.
The Group adopted IFRS 10, IFRS 11, IFRS 12 and IAS 28 (revised)
from 1 April 2014 and as a result, proportional consolidation of
joint venture results is no longer allowed. Under these accounting
standards, key line items such as statutory revenue, cost of sales,
inventory and debt no longer include the Group's portion of joint
venture balances. Instead, the Group's share of the statutory
results from joint ventures is accounted for under the equity
method. Therefore the Group's share of the results in joint
ventures is presented in one line in the income statement and the
statutory balance sheet includes one line representing the Group's
investment in joint ventures.
Joint ventures are an integral part of the business and the
Board has included an income statement and a balance sheet using
proportional consolidation for the results of joint ventures within
the Group's financial statements. These are presented in addition
to the Generally Accepted Accounting Principles (GAAP) compliant
versions of the income statement and balance sheet which present
joint ventures as equity investments.
The statutory accounts for the year ended 31 March 2017,
including the comparative information for the year ended 31 March
2016 have been prepared in accordance with International Financial
Reporting Standards (IFRS) including International Accounting
Standards (IAS) and International Financial Reporting
Interpretations Committee (IFRIC) interpretations as adopted for
use in the European Union and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS.
The directors have assessed the Group's projected business
activities and available financial resources together with detailed
forecasts for cash flow and relevant sensitivity analysis. The
directors believe that the Group remains well placed to manage its
business risks successfully. After making appropriate enquiries the
directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, the directors continue to adopt the going
concern basis in preparing the statutory accounts for the year
ended 31 March 2017.
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets, liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of uncertainty were
principally the same as those applied to the Group's financial
statements as at 31 March 2016.
2 Accounting policies
Accounting convention
The statutory accounts for the year ended
31 March 2017 have been prepared under
historical cost convention as modified
for reassessment of derivatives at fair
value and on a basis consistent with the
accounting policies in the financial statements
for the year ended 31 March 2016. The accounting
policies will be disclosed in full within
the Group's forthcoming financial statements.
3 Taxation
Taxation has been calculated on the profit
for the year ended 31 March 2017 at the
estimated effective tax rate of 20.5 per
cent (2016: 20.4 per cent).
4 Dividend paid Year Year ended
ended
31 March 31 March
2017 2016
GBP000 GBP000
----------------------------------- ---------- ------------
Prior year final dividend
paid in July 2016 of 7.7p
(July 2015: 6.0p) 5,746 3,618
Interim dividend paid in January
2017 of 7.2p
(January 2016: 6.5p) 5,389 4,825
11,135 8,443
----------------------------------- ---------- ------------
The final dividend proposed for the year
ended 31 March 2017 is 8.5 pence per ordinary
share. This dividend was declared after
31 March 2017 and as such the liability
of GBP6.4 million has not been recognised
at that date.
5 Earnings per share
Basic earnings per share is calculated
by dividing the earnings attributable to
ordinary shareholders by the weighted average
number of ordinary shares outstanding during
the year, excluding those held in the Share
Incentive Plan. For diluted earnings per
share, the weighted average number of ordinary
shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares.
Earnings per share have been calculated
using the following figures:
Year ended Year ended
31 March 31 March
2017 2016
Weighted average number
of shares in issue 74,716,939 65,498,340
Dilution - effect of share
schemes 395,643 572,176
-------------------------------- --------------- ---------------
Diluted weighted average
number of shares in issue 75,112,582 66,070,516
Profit on ordinary activities
after taxation GBP27,519,000 GBP25,726,000
Earnings per share:
Basic 36.8p 39.3p
Diluted 36.6p 38.9p
-------------------------------- --------------- ---------------
6 Segmental reporting
The Group has only one reportable segment, being housebuilding
in the United Kingdom. Financial analysis is presented to the chief
operating decision makers of the Group, being the Board of
directors, on a site by site basis. It is on this basis that the
Board makes decisions as to the allocation of resources and
assesses the Group's performance. The information is aggregated and
presented as one reportable segment given the sites share similar
economic characteristics.
Management information is presented to the Board of directors
with the Group's share of joint venture results proportionally
consolidated to reflect the true underlying performance of the
Group and the importance of joint ventures to the business. The
results disclosed within the Group's financial statements do not
proportionally consolidate joint venture results and instead they
are accounted for on an equity basis. A reconciliation between
management information and the Generally Accepted Accounting
Principles (GAAP) compliant information in the financial statements
is as follows:
Remove
Management share of
Year ended 31 March Information joint ventures GAAP
2017 GBP000 GBP000 GBP000
----------------------- -------------- ---------------- ------------
Revenue 291,921 (25,946) 265,975
Cost of sales (228,720) 19,754 (208,966)
----------------------- -------------- ---------------- ------------
Gross profit 63,201 (6,192) 57,009
Administrative
expenses (20,805) 78 (20,727)
Selling expenses (5,091) 948 (4,143)
Share of results
of joint ventures - 4,634 4,634
----------------------- -------------- ---------------- ------------
Operating profit 37,305 (532) 36,773
Net finance costs (3,177) 1,036 (2,141)
----------------------- -------------- ---------------- ------------
Profit before income
tax 34,128 504 34,632
Income tax expense (6,609) (504) (7,113)
----------------------- -------------- ---------------- ------------
Profit after income
tax 27,519 - 27,519
----------------------- -------------- ---------------- ------------
Inventories 339,380 (51,728) 287,652
Other assets 84,917 41,215 126,132
Total liabilities (220,012) 10,513 (209,499)
----------------------- -------------- ---------------- ------------
Net assets 204,285 - 204,285
----------------------- -------------- ---------------- ------------
Remove
Management share of
Year ended 31 March Information joint ventures GAAP
2016 GBP000 GBP000 GBP000
----------------------- -------------- ---------------- ------------
Revenue 245,581 (2,902) 242,679
Cost of sales (182,438) 1,569 (180,869)
----------------------- -------------- ---------------- ------------
Gross profit 63,143 (1,333) 61,810
Administrative
expenses (19,250) 194 (19,056)
Selling expenses (9,365) 188 (9,177)
Share of results
of joint ventures - 965 965
----------------------- -------------- ---------------- ------------
Operating profit 34,528 14 34,542
Net finance costs (2,325) 98 (2,227)
----------------------- -------------- ---------------- ------------
Profit before income
tax 32,203 112 32,315
Income tax expense (6,477) (112) (6,589)
----------------------- -------------- ---------------- ------------
Profit after income
tax 25,726 - 25,726
----------------------- -------------- ---------------- ------------
Inventories 285,610 (46,634) 238,976
Other assets 54,316 42,135 96,451
Total liabilities (152,956) 4,499 (148,457)
----------------------- -------------- ---------------- ------------
Net assets 186,970 - 186,970
----------------------- -------------- ---------------- ------------
7 Business combinations
On 30 June 2015, the Group acquired and took
control of the regeneration business of United
House Developments ('UHD') from United House
Group Holdings Limited ('UHGHL'). The regeneration
business of UHD consists of a group of companies
that have various interests in four significant
development opportunities in North and East
London.
Completion of one of the developments, Gallions
Quarter, was conditional on UHGHL securing
a legal interest in the site. On 28 July
2016 those conditions were met and the Group
completed its acquisition of Gallions Quarter.
The consideration for the business combination
as at 28 July 2016 was GBP3.56 million.
The consideration paid for the acquisition,
the fair value of the assets acquired and
liabilities assumed at the acquisition date
is as follows:
Consideration as at 28 July 2016
GBP000
Cash 3,556
Total consideration paid 3,556
------------------
Recognised amounts of identifiable assets acquired
and liabilities assumed which were consolidated
as at 28 July 2016 were:
Non current assets GBP000
Investments in joint ventures 3,556
Total fair value of net assets 3,556
------------------
Acquisition related costs of GBP18,000 have
been charged to administrative expenses in
the consolidated income statement for the
year ended 31 March 2017. Revenue and profit
recognised since the date of acquisition
are minimal and not significant to the Group.
The fair value of inventories acquired including
the Group's share of joint venture inventories
was GBP3,556,000. The method for determining
the fair value of inventory is to use the
expected selling price less costs to complete,
costs of disposal and expected margin for
each development.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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