'Chronic' need for new houses in London boosts Telford Homes

Telford Homes says it will take advantage of a “chronic” need for new homes in London, saying it is on track to deliver 2018 pre-tax profits in excess of £40m and £50m in the following year.

In May, the housebuilder announced annual profits for 2016/17 of £34.1m, on turnover of £292m.

The firm plans to tell shareholders at its AGM today that in spite of the political uncertainty caused by the recent general election there remains a lack of supply of new homes relative to need in non-prime areas of the capital.

This imbalance, coupled with its growing focus on build to rent, would underpin the company’s growth in the longer term, it will say.

Last month, Telford signed a deal with US-based build-to-rent investor firm Greystar to deliver 894 build-to-rent homes at Nine Elms in Battersea.

In April, the group exchanged contracts for the purchase of Stone Studios, a residential-led mixed-use development site in east London, a 110-home project worth £80m.

And last year Telford said its development pipeline had soared to a record £1.5bn, bolstered by the takeover of United House’s regeneration business in 2015.

Jon Di-Stefano, Telford’s chief executive, will tell shareholders today: “Our confidence in delivering continued growth remains unchanged, supported by the chronic need for new homes in London.

“Build-to-rent, in which the group has already secured over £230m of combined contract value representing nearly 500 homes, remains a strategic focus, and we expect to undertake further transactions in the sector.” 

He added that developments were being delivered on programme but the timing of completion was not evenly spread across the current financial year.

“We expect less than a quarter of the forecast open market handovers for the year to occur in the first six months and as a result full year profits will be significantly weighted towards the second half,” he added.