Telford Homes (TEF) accelerated its shift towards the build-to-rent sector last year, which accounted for 31 per cent of revenue – up from 21 per cent the prior year – and 70 per cent of the development pipeline. However, while those developments are less capital intensive, they also attract lower margins, which weighed on pre-tax profits. “The change in strategy is going to cost us a bit in the short-term, in order to drive growth in the long-term,” says chief executive Jon Di-Stefano.
The housebuilder entered two build-to-rent partnerships with asset managers M&G Real Estate and Invesco and is approaching completion on the first two schemes for the former investor. That boosted the overall development pipeline by 900 to 4,900 homes, with a total expected gross development value of £1.59bn from £1.31bn at the last count.
However, private sales remained challenging, with its Gallions Point development – due for completion in 2020 – securing only 15 sales from UK and Asia. However, the margin achieved on open market sales held steady at 28.3 per cent.
Analysts at house broker Peel Hunt expect adjusted pre-tax profits of £24m for the year to March 2020, giving EPS of 25.7p, from £40.1m and 44.5p the prior year.
| TELFORD HOMES (TEF) | ||||
| ORD PRICE: | 294p | MARKET VALUE: | £ 223m | |
| TOUCH: | 293.5-296p | 12-MONTH HIGH: | 472p | LOW: 260p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 333p | NET DEBT: | 37% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 173 | 25.1 | 33.2 | 11.1 |
| 2016 | 246 | 32.2 | 39.3 | 14.2 |
| 2017 | 292 | 34.6 | 36.8 | 15.7 |
| 2018 | 316 | 46.3 | 49.8 | 17.0 |
| 2019 | 354 | 40.3 | 44.6 | 17.0 |
| % change | +12 | -13 | -10 | - |
| Ex-div: | 06 Jun | |||
| Payment: | 19 Jul |
