AIM-listed residential property developer Telford Homes reported record full-year revenue and profit on Wednesday amid strong demand.
In the year to 31 March 2018, pre-tax profit increased 35% to £46m, exceeding analysts' expectations, with revenue rising to £316.2m from £291.9m. Telford said it was well placed to exceed £50m of total pre-tax profit for the year to the end of March 2019, representing a 100% cent increase over four years.
The group said it completed and handed over 476 open market homes during the year, up from 289 in 2017. A combination of the significant increase in recognised profit from these completions of forward sold homes and fewer launches in the last year reduced the total forward sold position to £344m from £546m. This was further exacerbated by the timing of some significant build to rent transactions occurring in the final few months of the year to 31 March 2017, with the next new build to rent sales expected in the year to 31 March 2019.
The company declared a final dividend of 9p per share, giving a total payout of 17p, up from 15.7p the year before.
Chief executive Jon Di-Stefano said: "Telford Homes continues to perform well and I am delighted to report such a strong set of results which again have produced record levels of revenue and profit. As we increase the scale of the business, our growth is underpinned by the under supply of new homes in London and robust demand at more affordable price points, particularly for rental housing. Our substantial development pipeline and increasing expertise in the burgeoning build to rent sector provide us with confidence for the future. I believe our increased focus on build to rent will drive the next phase of our growth and allow us to consistently deliver total pre-tax profits in excess of £50m.
"The strength of our position and our ability to capitalise on the exciting possibilities ahead are a result of the hard work and dedication of the whole Telford Homes team. I am exceptionally proud of the customer recommendation and employee satisfaction scores we achieved last year and I am confident there is a relationship between them. I look forward to us building on the solid foundation we have created for Telford Homes both in the year ahead and beyond."
Canaccord Genuity said: "The forward order book has fallen due to the timing of completions being taken and build to rent sales coming through but the comments on underlying trading for its core more affordable London markets remain generally encouraging.
"The group has a strong pipeline and continues to develop its build to rent business to support profit growth. Consensus looks well supported and management has delivered good profit growth over the last four years. Valuation looks less compelling after the recent share price run but with improved visibility of profits and growth supported by build to rent, it looks well supported."
At 1045 BST, the shares
were down 2.2% to 448.22p.