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It's Interesting Greg Fitzgerald has been allowed to get away with this- surely he is bound by Insider trading rules and thus should not be allowed to deal in the companies shares during a closed period whilst full year results are yet to be released.
It is a mistake to assess past performance with future performance. Although Taylor Wimpey has enjoyed market leading gains over the past 7 years, it is now approaching maturity and closing in on its 14000 unit cap. This means growth is likely to slow and share price gains will too. This is the reason many, myself included, sold out of TW and invested elsewhere in companies that have stronger growth potential. You can't look at past performance and extrapolate that into the future; you need to analyse and understand the companies business model. Taylor Wimpey is likely to top out at about £2.50 several years out, where as Inland Homes can easily double in the same time frame due to its stonger growth.
Idiots at IC had incorrectly marked this as a sell yesterday, possibly explaining the ludicrous dip. Have now marked up correctly as a buy: "This is early cycle for us," says Urban&Civic (UANC) executive chairman Nigel Hugill in the company's second set of results since it reversed into Aim-traded peer Terrace Hill to become a public company. The property developer has spent the last six months investing much of the £170m raised last year. Its portfolio now includes interests in 25,000 residential plots in areas where disposable incomes and populations are recovering. Investments in the period totalled £105m, including two prime sites in Manchester worth £23.8m, and an agreement with Hopkins Homes to develop 5,000 residential plots in Cambridgeshire. In February the company also bought Catesby Property for £34m. The deal should boost earnings this financial year and adds a stake in 2,600 homes set for development in Nottinghamshire. Excluding the value of associated commercial development land, the price tag equates to about £8,300 per un-serviced plot, which U&C believes leaves scope for significant gains. The strong pipeline may be tempered by politics, however. U&C believes the recent Conservative election win could lead to a drop in its planning application success rate, following a trend that has emerged in the last six months. Analysts at Stifel are forecasting adjusted book value of 280p for the September year-end, compared with 250p last September. Urban&Civic's shares trade at an 11 per cent discount to forecast year-end book value. They've done well in the past year, and our long-standing buy tip (170p, 6 Nov 2009) is now in the money. But the share price discount and Britain's housing shortage should underpin further gains. Buy.
Looking forward to the Interim results here tomorrow..
Interesting RNS today re future sale/ merger of remaining business.
Nice tip on the tef board. With cash to spare and other builders now looking relatively expensive I too am in with a small investment of 5000 shares. Was looking at bellway and redrow which I still believe are two other relatively cheaply valued buikding stocks but they have subsequently surged since the election result which caught me out! This looks good value with some interesting projects and a very impressive board. I look forward to analysing the forthcoming results! Simon Thompson also writes in IC that he will revisit this stock in the next few weeks- I imagine after results. Hopefully this will provide some publicity and a subsequent uplift. He also says he will take a look at tefs results when out.
The business model here is different to our peers in the respect that a key part of our operations focus on progressing brownfield sites through the planning process and then selling these oven ready plots onto other house builders. A larger proportion of our landbank is thus held as oven ready plots and thus we could be seen to be "landbanking" to a greater extend than our peers, which a Labour government would punish. Given our greater exposure here I therefore think, in the current political environment, this is resulting in higher risk here and has resulted in downward pressure on the share price. Until we know the outcome on May 7th/8th I feel we will continue to drift in the 60-65 pence range.
Good post Dommo- your comments echo my thoughts exactly. The planning process has also slowed significantly in the run up to the election as of late which does not help us here either. I've been using the retrace as an opportunity to top up further, but I'm also keeping some cash on the sidelines ready to see how the election turns out.
The shares are reasonably priced on an earnings-based valuation too: the company’s current market capitalisation of £134m equates to 12 times its fiscal 2016 post-tax profit estimates. I would also point out that although Inland’s agreement with Christian Candy's CPC Group - to jointly fund the acquisition of brownfield sites with the potential for residential or mixed-use development across the South-East of England – has promise, it has no implications on the above profit and net asset value estimates as the planning process has only just started on the joint venture’s first project in High Wycombe. I would also point out that the press comment earlier this week in our sister publication The Financial Times, referred to Candy & Candy Holdings, one of Nick and Christian Candy’s companies, and not CPC Group, Inland’s joint venture partner. So after taking into full consideration the possibility of Inland realising substantial value for shareholders from future land sales, and increasing profits from house building in what remains a benign environment, I feel the shares are well worth holding onto at the current price. True, the forthcoming election increases uncertainty short-term, but I would still run your bumper profits with a view of achieving my upgraded year-end target price of around 80p.
That’s the main reason why analysts at W.H. Ireland calculate the company has a sum-on-the-parts valuation of 100p a share. Developments with bumper profit potential For instance, consider the value in Inland’s flagship development project at the former MoD site at Wilton Park in Beaconsfield, Buckinghamshire. This site was acquired for £35m last year including deferred consideration of £29m to be paid over the next three years. A planning application is being submitted for a development of 350 homes, and should be approved after the Development Brief was adopted by the South Bucks District Council at the end of March. This is prime real estate with houses in the area amongst the priciest in the UK outside London. Indeed, based on a gross development value of £300m, the average price per unit is around £860,000 per home, so there should be bumper profits to me made. Using a 25 per cent gross margin and an 80 per cent profit share implies a post-tax profit of around £47m for Inland, or the equivalent of 23p per Inland share. Excluding Wilton Park and other joint ventures, analysts estimate that the open market value for the company’s 1,656 plots of owned land is in excess of £80,000 a plot, or more than double the implied carrying value in the company’s latest accounts. The difference between book value and open market value on these land holdings alone is around £70m, a sum worth 35p per Inland share. It’s not difficult to make a case that once you mark all the company’s land holdings to market value, including the value tied up in land under option, then Inland’s true net asset value per share could be easily be treble the 33.3p figure in the latest accounts. Potential bid target It’s not beyond the realms of possibility either that the UK’s largest homebuilders may be tempted to swoop on Inland as an easy way of getting their hands on a valuable land bank located in prosperous southern England. It’s highly unlikely that I am the only one doing the above calculations. And with Inalnd’s top six shareholders owning 34.6 per cent of the issued share capital, including founder Stephen Wicks who has an 8 per cent shareholding, then surely any take-out price would have to be close to the 100p sum-of-the-parts valuation. Importantly, the company is well funded: net debt of £28.8m, including zero dividend preference shares of £12m, represents 42 per cent of shareholders funds. Admittedly, I am not banking on a takeover at this stage, but I still feel that the hidden value inherent in Inland’s land bank is yet to be properly reflected in its market capitalisation even after applying a small cap liquidity discount. In fact, applying a 20 per cent discount to sum-of-the-parts valuations implies a share price closer to 80p, or almost 25 per cent above the current level. The shares are reasonably priced on an earnings-based v
It’s decision time for one of my most profitable recommendations in the past couple of years, Aim-traded housebuilder and land developer Inland Homes (INL:64.5p). Having reiterated my long-term buy advice several times since initiating coverage in my 2013 Bargain share portfolio, the shares duly hit a record high and my 70p target price at the end of March post the company’s fiscal 2014 results. That represents a 200 per cent gain on my recommended buy-in price of 23p in February 2013. I also published a bullish update ahead of the financial results when the share price was 57.5p ('A fluid performance', 2 February 2015), and subsequently re-iterated that advice in early March when the price was around 65p (‘Housebuilders: Trading bumper gains’, 9 March 2015). Do the maths The question I have to ask myself now is whether there is enough share price upside left to warrant maintaining a financial interest. Analyst Nick Spoliar at broking house W.H. Ireland certainly thinks so as he has a target price of 80p and a sum-of-the-parts valuation of 100p a share. Analyst Duncan Hall at brokerage finnCap has a 70p target price and a hold recommendation on the shares. Based on Mr Hall’s estimates Inland is on course to more than double revenues to £89m in the financial year to end June 2015 and lift pre-tax profits by 40 per cent from £8.6m to £12m. On this basis, expect EPS to jump by almost 75 per cent to 4.7p, helped by a lower tax charge, to underpin a 50 per cent rise in the dividend to 0.9p a share. Those forecasts look solid as Inland has just reported a 68 per cent increase in pre-tax profits to £6.1m in the six months to end December 2014, or half the forecast full-year outcome. This performance was buoyed by a quadrupling in new build sales to just shy of 200 units in the company’s housebuilding business. Moreover, with 199 completions already booked in the fiscal year, Inland looks likely to beat Mr Hall’s full-year forecast of 270 units. The one fly in the ointment is the uncertainty on the timing of land sales caused by the forthcoming general election. That’s because even if Inland hits finnCap’s revenue estimate of £63m (based on 270 completions), then the company still needs to make some substantial land sales to achieve the £89m full-year revenue estimate. No realisations were made in the first half, and though there should be some material sales in the current quarter, predicting the exact timing is difficult. Still, that should not detract from the long-term investment case. Buoyed by a record land bank of over 4,500 plots, and with all the political parties recognising that the UK has a serious housing shortage, Inland is undoubtedly well placed to continue to realise the hidden value from its land holdings while at the same time ramping up its housebuilding operation. That’s the main reason why analysts at W.H. Ireland calculate th
Should see a nice rise here tomorrow, can't believe my luck.. only just bought some at 840p last week!
(INL) continues to bring land through the planning process to sell to hungry house builders. But the key driver of the explosive growth in the six months to December was the business of building homes itself. Completions jumped from 47 a year earlier to 199, and the resulting cashflow enabled payment of a maiden interim dividend. The company is currently operating on six sites, but further outlets are planned for the second half, and forward sales currently stand at £30m. Inland also uses joint venture partners as a way of boosting the capital it has available, thus accelerating its build rate. Late last year it entered into an agreement with Europa Capital on a site in Aylesbury that has the potential for 400 residential plots. Inland is also developing a further revenue stream by renting out properties, and rental income in the first half nearly doubled to £298,000. Significant land sales were earmarked, but none took place: delays mean these will probably take place in the second half. Reported net assets rose 11 per cent to £67.7m. But development sites are held at the lower of cost and net realisable value, and do not include the uplift that comes with gaining planning consent. Earlier estimates suggest that crystallising this hidden value would push the book value over 100p. Analysts at finnCap are forecasting 2015 full-year pre-tax profits of £12m (from £8.6m in 2014). INLAND HOMES (INL) ORD PRICE: 66.5p MARKET VALUE: £135m TOUCH: 66-67p 12-MONTH HIGH: 69p LOW: 43p DIVIDEND YIELD: 1.4% PE RATIO: 20 NET ASSET VALUE: 33p NET DEBT: 43% Half-year to 31 Dec Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p) 2013 12.8 3.6 1.4 nil 2014 54.5 6.1 1.9 0.3 % change +326 +68 +43 - Ex-div:09 Jul Payment:31 Jul IC View: Shares in Inland Homes have already soared well ahead of our recent buy tip (57p, 19 February 2015). Given the growth profile and the unrealised value, we see no reason to change our advice. Buy.
The stage is set nicely for us tomorrow! Could well test 70p, fingers crossed..
Very nice rise here today, my top up at 63p now looking cheap! I too feel we will test 70p here over the next week.. bring on 31 March! Any drop back below 65p and I will add more.
How have you split that 35% between the two? I was previously very heavily weighted towards TW (50% plus of my portfolio), but have now been increasing my steak here to such an extent that it now exceeds TW. I think going forward we will now outperform TW here in terms of total share holder return.. what do you think?
I'm also eagerly anticipating the results here Bazzaman, should be good! I had a small top up here yesterday at around 63p funded with a chunk of TW. I sold. What proportion of your total portfolio value do TW. and Inland make up if you don't mind me asking?
This is particularly good news for us given our focus on developing brownfield sites: http://www.bbc.co.uk/news/business-31668135
Colindale completion expected June 2015: http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/12257120.html