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Inland on the march

Inland Homes delivered a strong increase in housing completions last year, paving the way for a maiden interim dividend.
March 31, 2015

Inland Homes (INL) continues to bring land through the planning process to sell to hungry house builders. But the key driver of the explosive growth in the six months to December was the business of building homes itself. Completions jumped from 47 a year earlier to 199, and the resulting cashflow enabled payment of a maiden interim dividend.

IC TIP: Buy at 66.5p

The company is currently operating on six sites, but further outlets are planned for the second half, and forward sales currently stand at £30m. Inland also uses joint venture partners as a way of boosting the capital it has available, thus accelerating its build rate. Late last year it entered into an agreement with Europa Capital on a site in Aylesbury that has the potential for 400 residential plots.

Inland is also developing a further revenue stream by renting out properties, and rental income in the first half nearly doubled to £298,000. Significant land sales were earmarked, but none took place: delays mean these will probably take place in the second half.

Reported net assets rose 11 per cent to £67.7m. But development sites are held at the lower of cost and net realisable value, and do not include the uplift that comes with gaining planning consent. Earlier estimates suggest that crystallising this hidden value would push the book value over 100p.

Analysts at finnCap are forecasting 2015 full-year pre-tax profits of £12m (from £8.6m in 2014).

INLAND HOMES (INL)
ORD PRICE:66.5pMARKET VALUE:£135m
TOUCH:66-67p12-MONTH HIGH:69pLOW: 43p
DIVIDEND YIELD:1.4%PE RATIO:20
NET ASSET VALUE:33pNET DEBT:43%

Half-year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201312.83.61.4nil
201454.56.11.90.3
% change+326+68+43-

Ex-div:09 Jul

Payment:31 Jul