LONDON (Alliance News) - Telford Homes PLC Wednesday said it expects it pretax profit for its last financial year to "more than double" and assuming a stable market, expects annual pretax profit to increase over the next four financial years, causing it more than double again by March 31, 2018.
In a trading update ahead of its results for the year to March 31, the housebuilder said it will be reporting significant growth in margins, profits and its development pipeline for the period, as London's property market shows no sign of slowing.
"The London property market has remained buoyant, with demand from those wanting to live in London remaining well in excess of the supply of new homes," the firm said.
Telford said it has exchanged contracts for the sale of 515 open markets properties in the year and legally completed 492 open market properties resulting in a further advance on its "already strong pre-sold position."
At the period-end the company said it was 98% sold in terms of open market homes expected to legally complete in the year to March 31, 2015, over 70% sold for 2016 and over 25% sold for 2017.
"This has been achieved without any significant development launches in the second half of the financial year and with a number of major developments due to be launched in the next few months the pre-sold position is expected to increase further," Telford added.
The company plans to start work on a site opposite Westfield shopping centre in Stratford later this month which will consist of 181 new homes, including 157 open market properties.
Telford said the average price of the open market homes exchanged during the period increased to GBP400,000 from GBP353,000 last year.
The London-focused company said it continues to utilise the GBP20 million of equity raised in a share placing in June to strengthen its development pipeline.
The development pipeline at the period-end is expected to deliver revenue of GBP875 million compared with GBP627 million a year earlier, an increase of 40%.
Telford said it intends to maintain its current dividend policy of paying one third of after tax earnings in dividends and investing the rest back into the business.
"I am delighted that the board has sufficient visibility over future profits to give forward guidance that cumulative profit before tax over the next four financial years to March 31, 2018 will exceed GBP120 million," Chief Executive Jon Di-Stefano said in a statement.
"This will represent a substantial increase in the size of Telford Homes and be achieved ahead of our previous expectations. Given our area of operation and our prospects for the future I am looking forward with confidence to the next few years," he added.
The firm will publish its results on May 28.
The stock was trading up 4.3% at 351.625 pence per share Wednesday morning.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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