LONDON (Alliance News) - Shares in Telford Homes PLC fell Wednesday after the company warned that negative commentary around the outcome of Brexit is hurting the housing market and that there will be fewer completions in the first half of 2019 financial year than the second half.
Pretax profit for the first half to September-end is anticipated to be lower than the second half of 2019 financial year but above GBP8.7 million achieved in the first half of 2018 financial year, the company added.
Shares in the property developer were down 11% at 350.61 pence each in morning trade.
Telford Homes said there was little domestic investor demand during the first half and sales of homes priced above GBP600,000 were becoming more challenging and taking longer than expected.
However, sales have remained at a consistent rate, particularly on completed developments priced over GBP600,000, sold to owner-occupiers and through the Help to Buy scheme.
The company said it does not expect the situation to ease in the short term as negative sentiment caused by Brexit has led customers to take a "wait and see" approach or look for further price reductions.
In Build to Rent, Telford Homes reported that its partner Greystar Europe Holdings Ltd has secured planning approval for 894 rental homes in Nine Elms, south west London, with progress made towards entering a full build contract for Telford to start construction.
In addition, the company has been chosen to obtain planning consent for 700 homes on an East London site.
Telford Homes now has 90 homes left to sell, as well as some affordable and build to rent contracts to exchange in the next six months to achieve the target of reaching GBP50 million in pretax profit for the year to the end of March 2019.
Of these, 25 homes are priced above GBP600,000, however, the group said it has no reason to change its targets and is still on track to achieve its guidance assuming the market does not worsen.
"Our key objective is to fulfil the ongoing demand for the homes that London needs. Notwithstanding the uncertainty surrounding the outcome of Brexit, the Group continues to perform well and is focused on increasing the scale of the business driven by the need for homes at affordable price points, in particular in the rental sector," said Chief Executive Jon Di-Stefano.
