Revenue down 25% but housebuilder plans for expansion
East London listed housebuilder Telford Homes has seen profits fall in half after it reduced output and focused on affordable housing in the recession.
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Telford reported preliminary results today showing pre-tax profit of £3.0m for the year ending March 2011, compared to £7.3m the year previous, a fall of 59%. Revenue for the year fell by 24% to £121.1m.
However, the firm said the drops in revenue and profit had been planned for, and it was now lined up to expand with the help of a new £70m banking facility.
It has also achieved significant numbers of pre-sales of its new homes to far-eastern investors, with the number of contracts exchanged up by 45% to 368.
This, however, is not reflected in the bottom line because Telford books profit upon completion of the sale.
Chief executive Andrew Wiseman said: “We’re ramping up our construction and now have 1,500 homes under construction, and we’re acquiring land in what is still a reasonably depressed land market. There will be a big increase in our future performance.”
Wiseman said the number of homes completed would increase from 280 this year to up to 450 by 2013, and continue to increase beyond that.