Telford Homes is operating in a sweet spot - the London housing market - where demand for apartments has been swelled further by strong overseas demand. In fact, the housebuilder says that the strong level of pre-sales already secured will lead to a substantial increase in profits this year - so the shares remain attractive.
Telford ticked all the right boxes in the year, with contracts exchanged on open-market properties up 25 per cent at 460, and a further 542 affordable homes sold. Operating margins rose from 5.2 per cent to 6.2 per cent, too, and Telford has now completed its lower-margin developments - those with a greater than usual proportion of affordable housing and those open-market homes that had been achieving lower-than-expected sale prices.
That leaves the group in a position to rebuild margins back to a more typical 10 per cent level. Indeed, forward sales already include more than 65 per cent of the open-market sales targeted for the whole of this year. Around £50m was spent on acquiring new land as well and the number of properties in the development pipeline rose from 1,904 to 1,969 - all but 20 of which have detailed planning consent.
Broker Shore Capital expects pre-tax profit of £8m for 2013, giving adjusted EPS of 11.8p (£3m and 4.4p for 2012).
| TELFORD HOMES (TEF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 109p | MARKET VALUE: | £54.3m | |
| TOUCH: | 107-110p | 12-MONTH HIGH: | 114p | LOW: 61p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 133p | NET DEBT: | 82% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 97.0 | 6.50 | 12.2 | 10.0 |
| 2009 | 107 | 4.30 | 8.10 | nil |
| 2010 | 159 | 7.34 | 13.7 | 2.00 |
| 2011 | 121 | 3.03 | 4.80 | 2.50 |
| 2012 | 124 | 3.05 | 4.70 | 3.00 |
| % change | +2 | +1 | -2 | +20 |
Ex-div: 20 Jun Payment: 20 Jul | ||||
