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Still no Webcast to accompany the trading update

https://www.telfordhomes-ir.london/media/webcasts/

Analysts and media being told more than shareholders? Is that legal?

> the challenge now is to establish the business consistently delivering over £50 million of profit every year and furthermore to generate and sustain the next significant growth period

Demos, well spotted.

I remember it now, being disappointed that they set their sights so low!

>Do you retain any faith in TEF?

Yes I do but have sold 50% of my holding to spread the risk. The point I was making was that there seems to be more of a problem than just shifting profits forwards. Hoping to evoke some discussion from others who have a lot more experience of both TEF & the sector than I do.

The switch to mostly BTR sounds very interesting and over the long term for open market sales I'd expect a company building in London to benefit from HPI more than the rest of the country. Or has the overseas investor disappeared for good? What happens in the short term is anybody's guess.

Also bear in mind the figures I'm using for 2020 and 2021 are Analyst figures and the massive changes they've made show they got it wrong for 2019 and think they got it wrong for 2020 and 2021. TEF have never actually said anything about 2020 and 2021 until now. They now say "we now expect profit before tax for FY 2020 to be significantly below FY 2019. After FY 2020 total profits in each year will grow again, albeit at lower overall margins, underpinned and then accelerated by our increased focus on build to rent and the improved capital returns it brings." and this is based on "we do not anticipate a significant improvement in the individual sale market in the short term".

But do your own research. This is just my opinion and I could be wrong.

>The property market is contracting every day with less and less instructions so a firm wholly reliant on listings is gonna have trouble, bucket loads of it

>They and their LPEs (who are leaving as quickly as the CEOs) only make money when they sign a client up, and refer for conveyancing and mortgages,

>If they aren’t doing that (which they’re not) then games up

Sparkybhoy, I keep a close eye on the approximate # of PB's instructions in the UK and there wasn't much difference between Feb 2018 and Feb 2019. Does this mean their market share is growing if the market is contracting and the number of overall instructions are decreasing?

The number of LPEs have decreased from around 740 in February 2018 to about 650 of late and appear to have stayed around this level since July of 2018. No doubt comings and goings but things seem to be quite stable in terms of actual numbers.

In terms of turnover and profit for the UK, PB said they expected income from higher margin ancillary products like mortgages and conveyancing, which they sell to both buyers and sellers, to increase. So even though growth in the number of instructions remain flat, turnover and profit in the UK may well rise.

Of course that doesn't necessarily make the shares good value at the current price but the tens of thousands of instructions per year that they have taken from traditional agents may not be up for grabs as soon as traditional agents would like.

Should have said...

£15m City North profits moved to 2021 from 2020.

Terrace,

The analysts were estimating £50m or there about for 2019, 2020 and 2021. TEF estimated £50m+ for 2019.

TEF missed 2019 by £10m. £5m because deals never materialised and £5m because sales never completed. So this £10m now delayed to 2020.

£15m City North deal moved to 2020 from 2021.

So that's a £5m net drop for 2019 based on what TEF have said. Yet they are forecasting £10m drop so profits not just moved forward a year. Something else going on. Estimated profits have actually gone, not just moved forward.

Likewise for 2021. £15M of extra profit in 2021 so using Analyst estimated that's now £65m surely?

I think we're kidding ourselves if we think profits are just delayed.

£24M for 2020 - that certainly can't be explained by delayed profits. £15m have moved from 2019 to 2020 so that means there's only £9m from other sources. Just doesn't add up.

As for the value put on the business I would guess you could argue the same for BWY, RDW & CRST based on Analyst estimates. Looking at BWY the next 3 estimates are £672m, £704m and £718m. £2.094 billion. Market value £3.76 billion. TEF's next 3 add up to £94m so BWY better value on what Analysts are saying.

Terrace,

>profit delayed,not gone

If £15m from City North has moved from 2020 to 2021 then 2021 should be about £65m shouldn't it?

Likewise the £10m shifted from 2019 to 2020 should only leave a net reduction of £5m from the £50m estimate for 2020 shouldn't it? You posted 27p EPS for 2020 on Thursday. This must be about £20m to £25m less than forecast by analysts.

Not sure the numbers make sense unless profits have been wiped out by anticipated discounting. Possibly another explanation.

terrace,

So some pretty poor ROE numbers for TEF.

03/19 14%
03/20 8%
03/21 12%

1GW_

You could certainly argue that TEF's view on open market sales in London is highly relative to CRST too. Perhaps more so given that they are selling higher priced properties than TEF.

CRST talking more about asset values and dividend payments at their last conference call and not saying too much about trading since their profit warning. That left me feeling a little uneasy.

TEF's main problem is that everything seems to be delayed. If that's typical then guidance should reflect it. If it's untypical then it's bad luck and one of the risks of investing in a company with so few developments.

Peel Hunt have reduced their price target by 12.5% to 350p.

SP down 15% so unlikley to be "silly cheap".

Good value perhaps but not without risk.

Talking about £5M in fees for BTR no longer arising in FY. If this is from 9 Elms to any extent then they shouldn't have added the units to the pipeline and shouldn't have talked about them being "in" a construction deal.

Lower profits on open market sales. Only £5M of profit when they were still talking about £50M pbt but the range was £0 to £10M. The BTR and other deals were lower risk apparently.

The 9 Elms deal could still fall through and it's 25% of the pipeline, but I'm sure I'll be told that's not going to happen.

Seems like a business very prone to delays. They were talking about planning permission for 9 Elms by the end of 2017. Single deals going wrong have a major effect.

https://www.bbc.co.uk/news/business-47356866 - full blown economic crisis

https://www.theguardian.com/media/2019/feb/25/spare-rib-digital-archive-no-deal-brexit-british-library - Polly Russell, curator for contemporary politics and public life at the British Library says she would be personally devastated if access to the resource was suspended.

https://blogs.spectator.co.uk/2019/02/the-eu27-are-far-less-prepared-for-no-deal-brexit-than-youd-think/

Not sure if any of this is true but if it is it shows how naive all those politicians who want to remove "no deal" from the negotiating table are.

Things getting interesting again? Back to 271p or up and onward to 400p?

Sorry, wrong thread!

https://blogs.spectator.co.uk/2019/02/the-eu27-are-far-less-prepared-for-no-deal-brexit-than-youd-think/

Not sure if any of this is true but if it is it shows how naive all those politicians who want to remove "no deal" from the negotiating table are.

Things getting interesting again? Back to 271p or up and onwards to 400p?

>I feel they were lied to by charlitans who have played them for personal advantage

Plenty of lying and manipulation going on from both leavers & remainers.

I suppose that locally we can be thankful to the EU for all their funding to Liverpool over the years and whoever it was that made them EU Capital of Culture. Now the UK's tourist destination of choice after London (not sure why though although it's a cheap party weekend for the Irish). Students & Tourists flocking in.

Thanks James,

They have typically been pretty careful to point out the conditional nature of that agreement. Something they don't say this time which you'd think the lawyers would have spotted.

"and of course we're already in an agreement to build them nearly 900 homes"

Hopefully there will be an announcement soon which will clear things up.

James, what did you make of the reference to the 9 Elms deal?

Are they really not going to issue an RNS making a big deal about their biggest ever BTR deal worth surely £20M+ a year to them?

Your thoughts appreciated.

Just 1324 shares traded in the first hour (it was 324 until 08:55!).

TEF's RNS has hardly set the investor world alight.

"already in an agreement to build them nearly 900 homes"

Talking about Greystar. I wasn't aware that had reached the agreement stage. They missed a trick not issuing an RNS with details of that agreement.

Also JDS didn't really talk about Henderson Parks as though they were imminently going to be announced as the long term partner. Nor Greystar really.