Shares in Telford Homes (TEF) rose over 6 per cent after the London focused residential developer indicated that profits for the year to March 2014 will be significantly ahead of market expectations. Demand for apartments close to central London shows no signs of abating, and targeted sales for the current year are already fully sold. Moreover, the year 2015 is already 70 per cent pre-sold with over 55 per cent pre-sold for 2016.
Crucially, demand for its properties comes from a diverse range of buyers including owner-occupiers, UK-based investors and overseas buyers. And while Telford has joined the government's Help to Buy scheme, all the sales to date have been achieved without using this facility. Typically, in August it launched its Horizons development situated near Canary Wharf, and 109 of the 131 homes were sold virtually straight away even though completions will not finish until Spring 2017. Interestingly, the group has seen a significant rise in interest from Chinese buyers.
In view of the strong update, Shore Capital has revised its forecasts for the coming year to pre-tax profits of £17m, giving an EPS of 22.5p.
