Telford profits jump but ‘work to do’
Telford Homes saw an increase of profit before tax, up by 16.1% to £10.1m in H1 2018 against the same period last year.
Revenues increased by 31% to £129.6m.
Chief executive Jon Di-Stefano pointed to success in the London developer’s shift to focus on BTR, with a portfolio of 1,750 homes in the works.
Telford Homes saw an increase of profit before tax, up by 16.1% to £10.1m in H1 2018 against the same period last year.
Revenues increased by 31% to £129.6m.
Chief executive Jon Di-Stefano pointed to success in the London developer’s shift to focus on BTR, with a portfolio of 1,750 homes in the works.
Telford is progressing on a contract with Greystar to deliver 894 homes at Parkside Nine Elms.
The developer is anticipating an exchange of contracts with a major institutional partner to fund 257 homes at Equipment Works, Walthamstow (pictured). It is also partnering with an established property owner to develop 700 homes in East London.
But, Di-Stefano noted there was still “work to do” to achieve the 2019 pre-tax profit target of £50m.
He said: “The uncertainty arising from Brexit and indeed the wider political situation remains a concern across the sector, making it difficult to accurately predict sales rates over the coming months.”
The interim results come after Telford’s shares nosedived last month after it warned that mounting “negative commentary” around Brexit had led to a slump in demand for homes.
Di-Stefano said: “Our strategic shift towards purpose-built rental homes sold to institutional investors continues to be beneficial to our risk profile.
“We are committed to our strategy, which is built upon a fundamental undersupply of homes in non-prime locations in London and our belief that short-term market sentiment does not alter the long-term structural imbalance between housing supply and housing need.”
He added: “We still have work to do in order to achieve our original target of exceeding £50 million of total profit before tax for the year to 31 March 2019 and Brexit brings a certain amount of unpredictability to that.”
Telford has a development pipeline of £1.65 bn of future revenue comprising over 5,000 homes. Savills is advising the developer in its search for a long-term funding partner for PRS opportunities.
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