Telford remains cautious

East London-based residential developer Telford Homes says its markets remain uncertain but it is trading in line with expectations. That still means that there will be a sharp fall in profit in the year to March 2011. Management sees little likelihood of improvement in the market before 2012. There has been a greater emphasis on social housing in recent years and this is lower margin. Several sites are coming up for completion and they will generate a large amount of group income this year. Cuts in government grant funding mean that Telford is going to shun any new social housing sites until the situation is clearer. Telford sold 206 homes in the six months but the number of open market completions fell from 224 to 133. Telford is buying more land and exercising options over sites. The company has also bought RBS's 50% stake in Greenwich Creekside - at cost with payment deferred. Net debt increased from £37.2m to £45.6m in the six months to September 2010. Negotiations continue about a longer-term bank facility. The interim figures will be released on 1 December.