Selling land to housebuilders can be a lumpy affair, which explains the drop in half-year profits at brownfield regeneration specialist Inland Homes (INL). However, a majority of the sales going through are likely to be completed in the second half, and management confidence is reflected in the interim dividend hike.
Inland is also accelerating its own building, and the land bank is now a record 7,151 plots, of which 2,440 have planning consent. Sales of 101 units were just behind the previous half-year, but forward sales were up by a half at £31.8m. Margins were affected by the previous failure of a sub-contractor and fell from 24.1 per cent to 20 per cent. However, the group has since been building up its own in-house capability, with its own operation now accounting for 226 of the 389 units currently under construction.
Operating highlights included the start of building at Meridian Waterside in Southampton, which will ultimately deliver 351 homes. In a partnership agreement, work will soon start on a regeneration project in High Wycombe for 239 homes with a gross development value of £75m. And in a joint venture with Southampton City Council, there is a resolution to grant consent for 457 units at Chapel Riverside.
Stifel forecasts adjusted net asset value (NAV) per share of 100p at the end of June 2017, from 92p at the end of 2016.
| INLAND HOMES (INL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 60.5p | MARKET VALUE: | £122m | |
| TOUCH: | 60-61p | 12-MONTH HIGH: | 85p | LOW: 46p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 58p | NET DEBT: | 52% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 55.1 | 21.5 | 10.0 | 0.4 |
| 2016 | 32.6 | 4.4 | 1.7 | 0.5 |
| % change | -41 | -80 | -83 | +25 |
Ex-div: 1 Jun Payment: 23 Jun | ||||
