Just tippedas a Buy on Master Investor4 Nov 2021 13:50
Https://masterinvestor.co.uk/equities/another-look-at-inland-homes-and-the-brighton-pier-group/
"Inland Homes (LON:INL) – Well I told you ‘brownfield’ was OK!
You may well have missed it – the announcement on Monday that the major property group Land Securities has just pulled off a mega-coup in paying £190m for the U+I Group (LON:UAI).
That company was one of my profiled stocks earlier this year (13.01.21 @ 63p set a Target Price of 80p*).
So, I am delighted with the LandSec agreed bid of 149p cash almost eleven months later. That is a clear 136% improvement.
Why am I mentioning this fact – Well the answer is that it is a player in the ‘brownfield’ sector and of similar size to my recently featured Inland Homes group, which is also a big ‘brownfield’ specialist.
As I detailed last Friday, its shares are significantly undervalued, begging the question could another property sector ‘biggie’ also be looking to take it out of the scene?
At the start of the week Inland issued a very bullish Trading Update, which helps to highlight further just how undervalued its shares really are at the current levels.
Very increased dealing volumes this week – Over six times the average deals were completed on Monday after this group’s Trading Update was declared – some 1.34m shares having been traded on the day. They closed up 7.5% at 50p.
Then yesterday they edged even higher to 55p, before closing at 53.5p, after some 1.17m shares were traded.
The average daily volume is around 200,000.
Finals due in two months –The annual results for the year to end September will be announced in January, however Monday’s Update spelled out significant progress in the group’s strategy to reduce net debt and looking to maximise its land values as it pursues its ‘asset light’ capital management.
It finished the second half of the year very strongly, with demand for its high-quality affordable housing more than doubling in the year from £23.8m to £56.5m in sales.
The group’s partnership side also did very well, while its order book has increased 56% to £164.7m.
Confidence in the current year – With this Update boss Stephen Wicks stated that “The group has made significant progress in delivering its key strategic objectives. Net debt has decreased substantially, and we continue to look for opportunities to deliver value from our considerable landbank.”
The company continues to see sustained demand from investors, build-to-rent operators, registered providers and private house buyers for its land, the new homes it builds and the group’s planning and building expertise.
Wicks went on to declare that “We look forward to reporting further progress on our strategic priorities in the year ahead.”
My View – This group’s shares are worth well over twice the current price on its net asset value basis.
If a bidder started to stalk the company, whilst its shares are so undervalued, the price response would be swiftly higher than even Panmu
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