Telford Homes profit trebles in strong year

Listed housebuilder Telford Homes has posted strong preliminary results for the year ended 31 March 2013, with profit trebling to £9m from £3m the previous year.

Revenue also grew 14% to £142.4m from £124.4m the previous year.

The London-focused firm was boosted by “exceptional demand” for homes in the capital, with a 75% increase in contracts exchanged on open market properties – 803, up from 460.

Telford is ramping up its development pipeline and said it has the capacity to acquire more land in central London.

The firm’s development pipeline increased to 2,260 properties – up from 1,969 the previous year – which the firm expects to deliver revenue in excess of £650m.

Telford said all sales to date had been achieved “without any assistance from government backed mortgage schemes including ‘NewBuy’ and ‘Help to Buy’”.

The firm increased its total dividend to 4.8p, up from 3p the previous year.

Telford noted it had recently increased its bank facility to £120m and extended this to September 2016 and hailed its success in joining the GLA’s London Development Panel.

The board expects another substantial increase in pre-tax profits in this financial year.

Jon Di-Stefano, chief executive of Telford Homes, said:  “Telford Homes has trebled profit before tax for the year to 31 March 2013 and experienced exceptional levels of demand in recent months.  The Group has already sold 99 per cent of the open market properties expected to be completed in the year to 31 March 2014 and more than 50 per cent for each of the following two years. 

“The business is in an excellent position with increasing margins, a significant development pipeline, enhanced financial strength and an unprecedented level of pre-sales all underpinning the Board’s expectations of substantial profit growth in the next three years.”

Di-Stefano dismissed concerns of a house price bubble developing in London.

He said bank finance was now more limited than pre-financial crash and this would “put a brake” on house prices. He added: “I expect we’ll see stable price growth this time round, which is what we want to see.”

He said the firm’s strong results had allowed it to “take a stronger view of what we’re doing looking forward” in terms of developments and land buying.