9th Oct 2007 07:00
Telford Homes PLC09 October 2007 Press Release 9 October 2007 Telford Homes Plc ("Telford Homes" or "the Company") Trading update Telford Homes Plc (AIM:TEF), the residential developer in East London noted forregeneration projects within public sector partnerships, is pleased to give thefollowing trading update ahead of its interim results which will be released on4 December 2007. Financial update Telford Homes has continued the successful start to the year, as reported at theAnnual General Meeting on 5 July 2007. Sales in the first half of the year havebeen strong with the results for the six months to 30 September 2007 in linewith expectations. The Company has continued to market properties at an earlystage in construction in order to secure future cash flow and reduce the risk ineach development. There are around 1,650 properties currently under constructionacross 13 developments and over 1,400 are sold with contracts exchanged. Inaddition the rate of sales at Queen Mary's Gate in Woodford, the Company's onlysignificant sales outlet, has been maintained through the summer. There hasbeen little immediate impact from rising interest rates and the recentdisruption in credit markets and with full year results weighted towards thefirst half the Company is well on track to meet market expectations for the yearto 31 March 2008. Operational structure The divisional structure created three years ago has been successful in managingthe Company's growth to date and enables the creation of further divisionsdepending on operational requirements. Consequently, due to continuedexpansion, the Company is in the process of creating a third division alongsideAlto and Metro which will increase the Company's capacity for mid-sizeddevelopments. The new division, to be named Strada, will be under the controlof Mark Parker who will continue to be responsible for Telford Homes Metro. Partnerships Telford Homes is pleased to announce that it has been chosen as a pre-qualifiedpartner for the Housing Corporation. The Company was approached directly andasked to participate in the process, and was successful in its application. Nowthat the Company has been awarded this status, it is able to bid for grants forits developments, a strategic advantage, as it affords Telford Homes moreflexibility and control in the financing of affordable housing. This statusreflects the Company's long term commitment to public sector partnerships. Andrew Wiseman, Chief Executive of Telford Homes, commented: "The Board ispleased that the Company has achieved further success in the first half of theyear, despite the difficulty of bringing homes to market due to delays in theplanning process. Continuing strength in the local rental market has encourageddemand from buy-to-let investors and consequently we remain able to pre-sell ourproperties and reduce the risk in each development. We have seen littleimmediate impact from rising interest rates and the recent disruption in creditmarkets and are well on track to meet market expectations for the year to 31March 2008. "The new division is indicative of Telford Homes' growth, and will enable theCompany to pursue more opportunities in the future. We are delighted to havebeen chosen as a pre-qualified partner by the Housing Corporation, as thisdemonstrates our commitment to public sector partnerships. Overall, theprogress made in the first half of this year demonstrates that the Company'ssolid infrastructure and external partnerships provide strong support forfurther growth." - Ends - For further information:Telford Homes PlcAndrew Wiseman, Chief Executive Tel: +44 (0) 1992 809 800 www.telfordhomes.plc.ukShore CapitalAlex Borrelli Tel: +44 (0) 20 7408 4090 Media enquiries:AbchurchChris Lane / Joanne Shears Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com Notes to Editors Telford Homes is an established house builder focusing on the regeneration ofbrownfield sites in the East and North London area. Since its inception in2000, the Company has delivered strong growth; for the year 2006/7, turnover was£104 million, a rise of 32% over 2005/6. The Company uses a mixture of debt andequity to purchase each site, and typically takes 70% debt on any newdevelopment both in terms of land cost and total development costs. The Company's successful record of selling properties at an early stage in thedevelopment allows greater visibility, and typically one third of anydevelopment is sold for affordable housing. Telford Homes has an excellenttrack record of working with housing associations and has forged many strongrelationships. Whilst the majority of every scheme is residential, often somecommercial units are required as a condition of the planning consent, which maybe used for office space, retail units, or community use. The Greater London Authority is predicting an increase of 800,000 in London'spopulation over the next ten years, and forecasts that the city will need 30,000new homes per year throughout this period. This huge pressure on the supply ofnew homes creates significant demand for the Company's services, operating in anindustry where demand far exceeds supply. The Company's pipeline at 31 March2007 included over 2,200 properties expected to produce around £100 million ofgross profit; this does not account for the properties which are anticipated tocome from its significant partnership with Eastend Homes. This partnershipalone is expected to deliver an additional 1,600 new homes between 2008 and2011. The Company currently has 13 developments in progress, with many moregoing through the planning process. For further information, please see www.telfordhomes.plc.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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