Telford Homes

Wednesday, 10th October 2018 09:25 - by Rajan Dhall

Telford Homes have provided us with their latest interim results for the six months ended 30 September 2018. Here are some of the highlights from the report:

We continue to believe that an enduring long term undersupply of homes that people can afford to live in will underpin our plans to increase our output and the scale of the business regardless of any short term Brexit impact.

Our strategic move into build to rent development has been well timed and we are confident this will form a significant part of the London market over the next few years.

Despite a more uncertain backdrop we have continued to achieve sales at a consistent rate in the last few months and particularly where the homes are priced under £600,000 on developments that are either complete or nearly complete.

We continue to see very little domestic investor demand from individuals.  In addition, the sale of homes above £600,000 has become more challenging.

We continue to anticipate achieving over £50 million of pre-tax profit assuming the market does not worsen further as the Brexit date approaches.

Profit before tax for H1 2019 will therefore be lower than H2 2019 but is expected to exceed the £8.7 million achieved in the six months to 30 September 2017.

The interim dividend is proposed to increase in accordance with the anticipated full year profit growth.

On the weekly chart below we are still in an uptrend but there is a could be a chance we could break lower. The trendline originating from the 253p low on the chart has been broken but the 383p level provided some support. With the report being soo mixed its hard to tell how the market will react to the increased dividend when the PBT for H1 2019 is dropping. Keep an eye on the 430p resistance level as it has further importance now as if the 383p level breaks we would now have made a lower high and lower low formation which could indicate a change in trend. If this is the case the next target on the downside is 361p which held at the begging of the year.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.