29th Sep 2014 09:00
LONDON (Alliance News) - Inland Homes PLC Monday reported higher profit and revenue for its last financial year, as completions more than doubled and its average selling prices rose, and it gave a positive outlook on the back of the continued recovery in the UK housebuilding market.
The specialist house builder and developer of brownfield sites also raised its dividend to 0.60 pence a share, from 0.27p, and said it expects to pay down debt significantly over the next six months.
UK housebuilders have had a very good 18 months, as activity has picked up strongly after several years in the doldrums in the wake of the financial crisis. UK house prices are rising fast once more, and the housebuilders have almost unlimited demand to tap into as there remains an acute shortage of new homes in the country.
Inland Homes, which operates mainly in the south of England where demand is most buoyant, reported a pretax profit of GBP8.6 million for the year to June 30, up from GBP5.2 million a year earlier, as revenue rose to GBP39.8 million, from GBP31.1 million, and its profit margins increased markedly. Net assets per share rose to 31.6p, from 28.7p.
It completed 114 units in the year, up from 55 a year earlier, and said it had got a lift from the UK government's Help to Buy mortgage guarantee scheme, with 62 buyers using the scheme. Its average selling price rose to GBP256,000 per unit, from GBP208,000.
The company continued to invest in land for future building, and its land bank stood at a record 3,734 plots at the end of the financial year, up from 2,306 plots on October 3, 2013. Of those, 1,318 have planning permission, up from 1,057.
It said its forward sales position stood at GBP54.6 million. It has 436 units under construction and expects legal completions on about 270 units in the current financial year. It is actively targeting opportunities within the private rented sector, and recently signed heads of terms with an institutional investor for a development of over 200 homes at Drayton Garden Village.
The investments it made in its land bank and ramping up its housebuilding activities meant its net borrowings rose to GBP28.8 million at the end of June, from GBP3.9 million a year earlier, but it said it expects to cut this significantly over the next six months using cash from forward sales and a number of planned land disposals.
Its operating cash flows before movements in working capital more than doubled to GBP11.6 million in fiscal 2014, from GBP5.1 million in fiscal 2013.
"This is an excellent set of results, ahead of market expectations, and provides further evidence that the strategic expansion of our housebuilding activity was well timed and effective," Chief Executive Stephen Wicks said in a statement.
"More importantly, we have been able to significantly increase our land bank, which stands at a record level, alongside the increase in housebuilding activity, providing a rich platform for future growth," he added.
Inland Homes shares were up 0.3% at 46.65 pence Monday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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