The problem with the valuation of development land it has a nasty habit of retrenching when access to capital becomes more difficult .What would be encouraging is a whole host of majors beating a path to Inland's door to buy it
Nothing to write home about really, profits were always going to be lumpy here and INL did warn they would be more heavily weighted towards the second half last year.. the latest planning successes will have already added to the EPRA NAV which is now forecast to hit 100p by FY.
I still see this as a great buy at 60p or below. Net assets have risen to 118mn in Dec so the business is trading at just 125/118 = 1.06x historical Net assets which is a very undemanding and will surely limit any significant downside risk.. but with considerable upside potential (as demonstrated by EPRA figures) the risk reward trade off seems heavily skewed to the latter here.
Appreciate that half years are no respecters of physical completion dates but lets hope that the majority of those £31.8m forward sales fall in H2 I thnk he needs to turn the tap on in getting some more land sales sorted not entirely confident that they have got a complete handle on actually building them
I've never sure that a mainstream builder would know what to do with them. There is a strong entrepreneurial streak at INL and as the founders would move on in the event of a sale - that would present a barrier to purchase. However I have held these for 4 years and when I retrace the increase in stock as I've reinvested the dividends - I am not sure I care!
To see any of these sites through is going to require a lot of capital which maybe wont be available to them in the future These sites are oven ready there is a bit of momenetum in M&A in the sector Wicks is a dealmaker and if he can sell out for 95p a share I certainly wouldnt complain
This morning's RNS shows that INL remain focussed on their strategy and are delivering in spades. I am wondering if this is going to stretch cash though - but other than that the pipeline is best described as "rich". The company is going to be worth an awful lot more as time moves on. It remains under valued. Good news and I am sure the interims next Tuesday will show our company going from strength to strength.
Paul Brett, Land Director at Inland Homes, commented:
"Altogether, these permissions represent a significant step forward for Inland Homes and mean that we now have a pipeline of 2,340 permitted plots. Securing these permissions is testament to our specialist expertise and the thorough work we undertake in bringing complex sites to a residential standard. Our understanding of the planning system and the strong relationships we have cultivated with local authorities in the region means we are ideally placed to further add to our development pipeline.
"Against the backdrop of the recent findings and recommendations published in the Government's housing White Paper, we are now on the way to providing well over 2,300 high quality and much needed homes in the South and South East."
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