3rd Apr 2007 07:30
Inland PLC03 April 2007 For immediate release 3 April 2007 Inland plc ("Inland", the "Group" or the "Company") FIRST DAY OF DEALING ON AIM Inland, which specialises in buying 'brown field' sites and enhancing theirvalue by obtaining planning permissions, is pleased to announce the commencementof trading in its shares on AIM under the ticker symbol INL. Inland has raised £50 million (before expenses), at the issue price of 50 penceper share giving the Company a market capitalization on admission, ofapproximately £81.1 million. Key Points • The reasons for the IPO and use of proceeds include: - to provide working capital and finance land purchases, in line with Inland's growth strategy- to provide a higher profile and greater credibility in the marketplace particularly with land vendors and their agents- to use quoted shares as consideration for acquisitions of companies or assets- to assist in attracting and retaining experienced staff • To date, Inland Homes Limited ("Inland Homes"), the Group's principal operating subsidiary, has acquired, obtained planning permission for, and sold, 25 building plots on two sites, producing an average annual return on its equity investment of 122 per cent. and an average annual return on capital employed of 96 per cent. • Dawnay, Day Corporate Finance Limited is acting as Nominated Adviser and KBC Peel Hunt Ltd is acting as Broker to Inland. Placing Statistics Placing Price 50 penceNumber of Placing Shares 100,000,000Number of Ordinary Shares in issue following the Placing 162,150,059Capitalisation at the Placing Price £81.1 millionGross proceeds of the Placing £50 millionEstimated net proceeds of the Placing £47.5 millionPlacing Shares as a percentage of the Enlarged Share Capital 62% For further information please contact: Inland Plc Tel: 01923 713 600Stephen Wicks, Chief ExecutiveNishith Malde, Finance Director Dawnay, Day Corporate Finance Limited, Nominated Adviser Tel: 020 7509 4570Gerald RaingoldDavid FloydAlex Stanbury KBC Peel Hunt Ltd, Broker Tel: 020 7418 8900Julian BluntNicholas Marren Buchanan Communications Tel: 020 7466 5000Mark EdwardsJeremy Garcia Additional Information The ManagementThe Group has an experienced management team, led by Stephen Wicks (ChiefExecutive) and Nishith Malde (Financial Director), who have had a workingrelationship for 17 years. In addition, Paul Brett and Stephen Trenwith are theland director and development director of Inland Homes Limited ("Inland Homes"),the Group's principal operating subsidiary. The Inland team worked successfullytogether at Country & Metropolitan plc, a residential and commercial propertydeveloper specialising in brown field sites, which was founded by Stephen Wicksin 1990. The HistoryThe Company is the holding company of Inland Homes, a residential and mixed-useproperty development company which specialises in buying brown field sites andenhancing their value through obtaining planning permissions, primarily forresidential and mixed-use development. Since its incorporation on 16 June 2005, Inland Homes has sold 25 building plotson two sites, producing an average annual return on equity of 122 per cent. andan average annual return on capital employed of 96 per cent. The Group currentlyowns or controls over 700 potential building plots, has investments in listedand unlisted securities including an interest in Howarth Homes plc ("Howarth"),a private house building company. The Group has already successfully acquired and disposed of two sites. The firstof these, in Beaconsfield, was acquired as a redundant haulage yard in November2005 and options were secured over two neighbouring gardens. Planning permissionfor 12 residential units and an office block was obtained in September 2006 andthe property was sold on at a profit which represented an average annual returnon capital employed of 94 per cent. and an average annual return on equityinvested of 146 per cent. The acquisition of the second site, a commercial property in Uxbridge, becameunconditional in January 2006 on terms which included a delayed completion untilOctober 2006. Planning permission for 12 residential units was obtained in May2006 and the profit made on the subsequent sale represented an average annualreturn on capital employed of 98 per cent. During 2006, Inland conducted a private placing to raise funds for thedevelopment of its operations. It raised £11.24 million from institutional andother investors through the issue of 32,122,050 Ordinary Shares at a price of 35pence each. The BusinessThe Group seeks to acquire properties with development potential and apply itsexpertise in planning to win consents and approvals prior to selling consentedland to house building companies. It also seeks to make strategic investments inquoted and unquoted companies. So far as possible, all planning and technical issues are resolved prior toselling sites so that they are acquired by builders on a ready to build basis.The Directors believe that, through its established management team andemployees, the Group has an extensive range of expertise and skills at itsdisposal including: • the management team has many years of experience in negotiating with vendors and their advisers and, in addition to its own staff, the Company has an extensive range of contacts who are able to bring opportunities to its attention; • the knowledge and experience required to make informed assessments of the development potential of individual sites; and • an in-depth understanding of planning regulations and practices. MarketThe Directors believe that demand for residential development sites remainsstrong with the number of households in England projected to increase from 20.9million in 2003 to 25.7 million in 2026 and an estimated current annualshortfall in new homes required of 48,766 (source: Communities and LocalGovernment Agency). Additionally, the Government has stated its objective of achieving 200,000 newhomes annually by 2016 (source: address by Ruth Kelly, Secretary of State forCommunities and Local Government, 13 February 2007). About 60 per cent. of the projected household growth is expected to be inLondon, South-West, East and South-East England, which are the Group's targetareas. Demand for land for residential development is therefore high and is likely toremain so for the foreseeable future. Current Government policy favoursdevelopment on brown field sites rather than green field land and this too is inline with the Group's business strategy. Competition for sites with planning permission is high and house builders arehaving to reduce margins and increase turnover to maintain or increaseprofitability. In the Directors' experience, house builders try to limit theirperiod of land bank retention to not more than three years and are reluctant tocommit capital until planning permission has been granted. The high level of competition is evidenced by the recent increase in takeoversand consolidation amongst the major house builders, which is substantiallydriven by the need to increase their holdings of developable land. The planning process is generally recognised as being cumbersome, restrictiveand subject to delays. Accordingly, the Group's ability to purchase brown fieldsites, obtain relevant planning permissions and sell plots on as 'ready tobuild' represents an attractive proposition to house builders. It reduces theirland holding time and thereby enables them to increase turnover. Corporate StrategyThe Group's principal strategic objective is to build up a land bank which wouldbe attractive to a major trade buyer. This will take a few years, during whichtime it will continue to sell certain sites where it can obtain favourableoffers. Once Inland has identified a site, it will devise an implementation plan forthat site, including an assessment of the most appropriate planning consents forthe location and the potential return on the ultimate disposal of the site toone or more house building companies. With regard to acquisitions, Inland will carry out due diligence on the siteincluding surveys, legal and environmental due diligence. Having acquired thesite, the Group will make appropriate planning applications and enter intonegotiations with the relevant planning authorities. It will also seek toidentify purchasers for the site. Inland will continue to invest in sites with purchase prices of up to £25million, concentrating its activities on areas of high demand (for example,where there are good transport links or attractive residential environments) andseek planning consents that are appropriate for the location and most desirableto house builders. The Group will also continue its strategy of identifying and acquiring strategicinvestments in quoted and unquoted companies. The Company currently has an equity interest, and convertible loan stock, in ahouse building company, Howarth. Inland may sell some sites to Howarth on anarms length basis and will share in Howarth's profitability by virtue of itsinvestment in the company. Current PortfolioThe Company has fourteen sites in its current portfolio, which are at varyingstages of the planning process. Selected properties are: Queensgate, Farnborough, HampshireThis 24.5 acre site was acquired from The Secretary of State for Defence in July2006. The site is located to the South of Farnborough town centre adjacent toFarnborough airfield. The site includes a number of buildings, one of which islet for an annual rental stream of £210,000 and negotiations are progressing fora long term lease of another building on the site. A planning application isbeing prepared to regenerate this brown field site with a predominantlyresidential scheme. The site is identified within the Borough Council local plan as being within apublished planning brief confirming its suitability for a mix of employment andresidential development. An initial master-planning exercise has shown that thesite has the capacity to provide up to 500 residential units along with someadditional commercial uses and Inland intends to submit a planning applicationduring 2007. Hayes, MiddlesexThis 4.2 acre site is located to the North East of Hayes town centre, adjacentto The Parkway (Hayes Bypass). The site was purchased in September 2006 withpayments spread over two years. A planning application for approximately 100houses and apartments is being prepared for submission. Redhill, SurreyThis property is a former public house on a large corner plot in a residentialarea south of Redhill. Inland Homes purchased the property unconditionally inAugust 2006 with an existing planning consent for 8 residential units on part ofthe site. A planning application has been submitted for 23 houses andapartments. Old Hatfield, HertfordshireInland Homes has a conditional contract to purchase the property known as HoweDell School, Old Hatfield. The property is set in five acres of landscapedgrounds. The site includes a Grade II Listed building, currently housing theprimary school, which totals approximately 10,000ft2. Inland anticipatesplanning consent being granted for the erection of 24 mews style houses in thegrounds. The purchase price is payable only upon planning permission beinggranted and once vacant possession is given. Northwood, MiddlesexThis is a detached property on a large plot in Northwood, Middlesex which waspurchased in the open market. An option has been secured for up to 18 months ona neighbouring house An application for planning permission has been submittedfor 14 apartments. Board of DirectorsStephen Wicks, Chief Executive (aged 55) was the founding shareholder and chiefexecutive of Country & Metropolitan plc, which was floated on the main market ofthe London Stock Exchange in December 1999 with a market capitalisation of £6.9million. He directed the growth of Country & Metropolitan plc until its disposalin April 2005 to Gladedale Holdings plc for approximately £72 million. Mr Wickshas worked in the construction and housebuilding sector all of his working lifeand has extensive knowledge of local and national policies on both green fieldand brown field sites. Nishith Malde, FCA Finance Director (aged 48) qualified as a CharteredAccountant in 1985 with KPMG and specialised in advising owner managedbusinesses. He left KPMG in 1989 to set up a consultancy firm which later mergedwith an audit practice where he was the partner responsible for the affairs ofCountry & Metropolitan plc. Mr Malde joined Country & Metropolitan plc asfinance director and company secretary in November 1998. He was activelyinvolved in the preparation for the flotation of Country & Metropolitan plc inDecember 1999 and its further development (which included acquisitions anddisposals) until it was acquired by Gladedale Holdings plc in April 2005. MrMalde was recently appointed to the board of Billam plc and is also anon-executive director of SLR Holdings Limited, which has a successfulinternational environmental consultancy business. Terry Roydon, Non executive Chairman (aged 60) holds a B.Sc. in EstateManagement from theUniversity of London and a Masters in Business Administration from theUniversity of Pittsburgh. He was previously chief executive of Prowting plc, aUK house builder, which he led to flotation on the London Stock Exchange in1988. The company was subsequently purchased by Westbury plc in June 2002 for£140 million. Since 1998, Mr Roydon has been a consultant and member of theboard of Dom Development S.A., a major quoted Polish residential developer,together with a number of non-executive and consultancy positions in UK andcontinental housebuilding companies, including holding non-executive boardpositions with AIM quoted Engel East Europe N.V., Country & Metropolitan plc(until 2005), Gladedale Holdings plc and McCann Homes Holdings Limited. From1995 to 1997 he was president of the European Union of House builders andDevelopers. Simon Bennett, Non executive director (aged 48) has over 20 years investmentbanking experience in the City. Mr Bennett qualified as a chartered accountantwith Saffery Champness in 1977. In 1982 he joined stockbrokers Scrimgeour KempGee which was subsequently acquired by Citicorp (now Citigroup) in 1986.Thereafter, Mr Bennett was instrumental in establishing the mid and small capadvisory business of Citicorp Scrimgeour Vickers which was focused on fastgrowing mid and small cap companies. In June 1990, Mr Bennett joined CreditLyonnais Securities and, following the defection of a team to a rival company,became Head of Corporate Finance and Head of the mid and small caps team in June2000. In June 2004 Mr Bennett left Credit Lyonnais, following its acquisition byCredit Agricole, and established Incremental Capital LLP to provide corporatefinance advice to mid and small cap companies. In the latter part of 2005, MrBennett joined Baker Tilly as Managing Director of Baker Tilly and Co. Limited.He has recently left the practice to concentrate full time on growing Citicourt& Co. Limited, where he is the Managing Director and the majority shareholder.Mr. Bennett is also non-executive chairman of Billam plc. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
INL.L