Telford Homes Share News (TEF)

There were big gains for Telford Homes Wednesday despite a drop in full-year profit as developer responsible for affordable homes in East London remains "cautiously optimistic".Profit before tax for the year ended 31 March 2009 slipped to £4.3m from £6.5m in 2008 due to £2.9m of write downs to the value of land and work in progress, plus £100,000 of redundancy costs.Before exceptional items, profit came in 12% higher at £7.3m on revenue up 10% to £106.7m. The number of open market property completions rose to 350 from 306. Net assets per share stood at 129.8p at the end of March."The regeneration of East London is ongoing, and we are confident in the prospects for the area, particularly as the slow down in open market residential construction will exacerbate the shortage of new housing," said chief executive Andrew Wiseman.Less than 20,000 new homes were built in the first quarter of this year, significantly lower than the government's target of 240,000 for the year."The board is cautiously optimistic, noting increased activity at our sales outlets over the last few weeks, steady progress on legal completions and our ability to secure affordable housing revenue," Wiseman added.He also told ShareCast that the housing market may not have much further to fall. Last month, Telford agreed a £57m grant programme with the Homes and Communities Agency across four sites owned by Telford and three estate regeneration projects in partnership with Eastend Homes. The money will part finance over 400 affordable homes over the next three years.Wiseman told ShareCast there were no plans for any speculative development, but that Telford has put options in place to buy land when market conditions are right.The company still has to secure completions on the 600 homes pre-sold between 2006 and 2008. It predicts failures of between 60 and 80 in the year to March 2010, assuming no improvement in mortgage availability.Telford has also scrapped the final dividend, although that came as little surprise as it did away with the interim payout in December. It paid a total of 10p a share last year."Telford Homes remains on a sound operational and financial platform and depending on market conditions the board hopes and expects to be able to return to paying dividends in the near future," it said.