INL.L Regulatory News (INL)

30 July 2014

Inland Homes PLC

('Inland Homes', 'Inland', the 'Group' or the 'Company')

Trading update

The Board of Inland Homes today provides the following update on trading ahead of its preliminary results announcement for the twelve months ended 30 June 2014, which will be announced in September 2014.

Inland has delivered a strong performance in the year to 30 June 2014 and will report preliminary results that are ahead of market expectations. The Group has made progress in all areas of its operations, significantly growing its landbank, delivering a substantial increase in the number of residential unit completions and continuing to generate value from sales of land with planning permission to volume housebuilders.

Expanded housebuilding programme developing according to plan and delivering results

As previously reported, the Group took a strategic decision to increase its housebuilding activity in order to take advantage of market conditions and extract maximum value from Inland's landbank. There has been a substantial increase in the number of residential unit completions, with the housebuilding activity playing an increasingly important role in generating Group profits.

In the financial year, Inland completed the sale of 114 (2013: 55) open market residential units (including the units being managed on behalf of Drayton Garden Village Limited ('DGVL')) delivering substantially increased gross revenues.

Inland Homes' share of profit for the provision of development services provided by the Group to DGVL has also increased to the maximum limit of 90 per cent.

Margins generated on the sale of residential units have continued to improve and are ahead of budgeted expectations, reflecting continuing strong demand for housing in the areas in which Inland operates. The Government's Help to Buy scheme remains a key selling tool, with 54 per cent of the Group's total private residential sales being made through the scheme.

Currently, the Group has 492 units under construction across nine sites (including the construction of 150 units managed for DGVL) with a record position of forward sales either agreed or contracted of £57.5 million (including sales managed on behalf of DGVL). Of particular note is the development of 152 units at West Plaza in Ashford where forward sales are currently £22.5million.

Continued landbank growth

The Group's overriding strategic goal is to continue to grow its landbank and add value by using its core skill set of navigating the planning system in order to secure planning permissions. Inland has had a highly productive year in this aspect of its operations, delivering total landbank growth of 57 per cent since 3 October 2013.

Demand for Inland's consented land from housebuilders remains strong, with 169 plots sold during the period (including plots sold by DGVL). The Group has recently received planning consent for 253 residential plots on two sites in Woolwich, South East London (152 plots) and in Ipswich (101 plots).

Balance sheet remains robust; sufficient financial firepower to drive future growth

The Group's cash balance stood at £11.2 million at 30 June 2014 (31 December 2013: £8.9 million). Work-in-progress increased by approximately 40% to £93.6 million since 31 December 2013, as a result of the Group's expanded housebuilding activity and the increase in its landbank. As expected this increase in working capital requirements has led to net borrowings, including the Zero Dividend Preference Shares, rising to £28.8 million as at 30 June 2014 (31 December 2013: £14.7 million).

Well positioned to exploit market opportunities in all areas

With a robust balance sheet and continuing strong demand from housebuilders, housing associations and the private rented sector, Inland is well placed to capitalise on its substantial land bank.

The Group remains confident of delivering further expansion of its activities in the current financial year, whilst continuing to focus on increasing its landbank in order to lock in long-term value.

Stephen Wicks, Inland Homes' Chief Executive commented: 

"Inland has had a very strong year and I am delighted with the progress the Group has made. We are delivering on our strategic goal of significantly increasing the underlying net asset value of the Group.

"We continue to assess a number of attractive land acquisition opportunities and this, combined with the strong demand for consented land leaves me highly confident that the Group will continue its strong progress in the future."

Notes to Editors:

Inland Homes acquires brownfield land in the South and South-East of England principally for residentially led development schemes. The business then enhances the land value by obtaining planning permission, before building open market and affordable homes or selling surplus consented land to other developers to generate cash to reinvest in new brownfield opportunities.