Telford Homes (TEF) delivered a near flawless performance for the year to March, pushing revenue up to a record high while implementing a significant rise in the dividend. But the real strength comes from the forward order book, where over half of the targeted revenue for the next three years has already been secured. And the development pipeline is now over £1.5bn, greater than six times the reported revenue in the last 12 months.
There has also been a significant change in the sales mix, with nearly a quarter of sales now made to institutional investors operating in the private rented sector, compared with zero a year earlier. The Pavilions site in north London was sold to London housing association L&Q for £67m, while another site was sold to M&G Real Estate for £63m.
These will offer a significant improvement in capital return because the schemes will be forward funded by L&Q and M&G, so require no debt and little equity from the group, allowing Telford to apply its capital resources elsewhere. It also brings forward profit recognition, albeit at a slightly smaller margin. More such schemes are likely to be pursued.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits of £33m and EPS of 35p for the year ending March 2017, compared with £32m and 39p in FY2016.
| TELFORD HOMES (TEF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 369p | MARKET VALUE: | £276m | |
| TOUCH: | 369-371.25p | 12-MONTH HIGH: | 493p | LOW: 312p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 250p | NET DEBT: | 9% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 124 | 3.1 | 4.7 | 3 |
| 2013 | 142 | 9.0 | 14.3 | 4.8 |
| 2014 | 141 | 19.2 | 26.4 | 8.8 |
| 2015 | 173 | 25.1 | 33.2 | 11.1 |
| 2016 | 246 | 32.2 | 39.3 | 14.2 |
| % change | +42 | +28 | +18 | +28 |
Ex-div: 16 Jun Payment: 15 Jul | ||||
