Telford Homes Regulatory News (TEF)

Telford Homes Plc

("Telford Homes", the "Company" or the "Group")

Placing to raise £20 million

Telford Homes Plc (AIM:TEF), the London focused residential property developer, today announces that it proposes to raise £20 million, before expenses, through a substantially oversubscribed conditional placing arranged by Shore Capital. The placing price of 250 pence per share represents a 0.8 per cent. discount to the middle market closing price of 252 pence per ordinary share on 11 June 2013.

Introduction

The Company proposes to raise £20 million, before expenses, by way of a placing of 8,000,000 new Ordinary Shares at a price of 250 pence per share (the "Placing" or "Placing Shares", as appropriate). The net proceeds of the Placing (expected to be approximately £19.24 million) will allow the Group to invest in new development opportunities.

The Placing is conditional, amongst other things, upon Shareholders passing certain Resolutions at a general meeting of the Company to be held at 2.00 p.m. on 1 July 2013 (the "General Meeting"). As a result, a circular (the "Circular") is expected to be sent to Shareholders on 14 June 2013 containing information in relation to the Placing and to convene the General Meeting. The Placing, which has been arranged by Shore Capital Stockbrokers Limited ("Shore Capital Stockbrokers") pursuant to the terms of a placing agreement dated 11 June 2013 (the "Placing Agreement"), is also conditional upon admission of the Placing Shares to trading on AIM ("Admission").

The Circular will be available on the Company's website at www.telfordhomes.plc.uk in due course.

Commenting on the Placing, Jon Di-Stefano, Chief Executive of Telford Homes, said: "Following the announcement of the Group's results for the year to 31 March 2013, I am delighted that our exceptional sales performance and the many opportunities for Telford Homes to grow in London have resulted in our proposed Placing to raise £20 million being substantially oversubscribed. I am also pleased that the proposed Placing introduces a number of new shareholders.

"Together with our increased bank facility secured in April 2013 the equity raised will give the Group nearly £50 million to invest in new development opportunities, some of which have already been identified. This investment will accelerate the growth of Telford Homes and underlines our belief in the long term future of the housing market in London."

Background to and reasons for the Placing

Telford Homes is an established residential property developer which builds new homes in inner London. The Company obtains planning consents within a complex planning environment, designs and constructs high quality developments and focuses on excellent customer service.

The housing market in inner London has been particularly strong in recent months with the Company reporting exceptional demand in its preliminary results for the year ended 31 March 2013 which were announced on 29 May 2013. This has led to an unprecedented pre-sales position with 99 per cent of the expected open market completions for the year to 31 March 2014 having already been sold, and over 50 per cent of the expected open market completions for each of the years ended 31 March 2015 and 2016 having also been sold. These pre-sales have been achieved without the benefits expected from the launch of the Government's Help to Buy equity loan scheme which is helping to increase the rate of sale for other developers. The Company expects to join this scheme in the next few weeks.

The Company's sales success is, in part, a function of an imbalance between the high level of demand for homes in London, both for purchase and to rent, and the level of supply of those homes. For several years the housebuilding industry has been unable to meet the anticipated demand for new homes in London and yet population growth has continued throughout that period. The Directors have concluded that, in the light of the strength of the micro-economy in London, its continuing worldwide reputation and the fundamental on-going shortage of supply of new homes, there is capacity for the Company to significantly increase its output over the next few years.

The Company has been very successful in buying land over the last 18 months and has a development pipeline of 2,260 homes that are expected to deliver over £650 million of revenue over the next three to four years. In addition, the Company considers that there are many more opportunities in inner London and it has already identified some specific opportunities which the Directors believe will further enhance profits.

The Company has expertise in enhancing value for landowners and has long standing partnerships with affordable housing providers that have been a source of many development opportunities over the last few years. Furthermore, the Company has been elected to the Greater London Authority's 'London Development Panel' which is likely to be a major source of publically owned land over the next few years.

The Directors have therefore decided to raise £20 million (before expenses) pursuant to the Placing in order to provide the Company with additional funds to acquire and construct new development opportunities.

The Company has already secured an increased debt facility of £120 million from its banking partners and therefore the finance is already in place to be drawn down alongside the equity raised. The Company expects that debt finance will represent 60 per cent of any expenditure on new development opportunities.

The Placing

The Company is proposing to raise, in aggregate, £20 million (before commissions and expenses) through the issue of the Placing Shares at a price of 250p per share (the "Placing Price"). The Placing Shares will represent approximately 13.70 per cent. of the Company's enlarged share capital immediately following Admission. The Placing Price represents a discount of approximately 0.8 per cent. to the closing middle market price on 11 June 2013, being the last practicable date prior to the announcement of the Placing. The Placing Shares will rank in full for all dividends with a record date on or after the date of Admission and otherwise equally with the existing Ordinary Shares from the date of Admission. It is expected that the Placing Shares will be admitted to trading on AIM on 2 July 2013. The Placing (which is not underwritten) is conditional, amongst other things, upon:

in each case by no later than 8.00 a.m. on 2 July 2013 (or such time and date as the Company and Shore Capital may agree, being not later than 5.00 p.m. on 31 July 2013).

The Placing Agreement

Pursuant to the terms of the Placing Agreement, Shore Capital Stockbrokers, as agent for the Company, has agreed conditionally to use its reasonable endeavours to place the Placing Shares on a non-underwritten basis at the Placing Price.

The Placing Agreement contains certain warranties from the Company and the Directors in favour of Shore Capital Stockbrokers and Shore Capital and Corporate Limited ("Shore Capital and Corporate") in relation to, amongst other things, the accuracy of the information contained in this document and certain other matters relating to the Company and its business. In addition, the Company has agreed to indemnify Shore Capital Stockbrokers and Shore Capital and Corporate in relation to certain liabilities either of them may incur in respect of the Placing. Each of Shore Capital Stockbrokers and Shore Capital and Corporate has the right to terminate the Placing Agreement in certain circumstances prior to Admission, including without limitation, for an event of force majeure or in the event of a material breach of the warranties set out in the Placing Agreement.

Admission and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission to AIM will become effective and that dealings will commence on 2 July 2013. Admission is subject to the passing of certain Resolutions at the General Meeting and to the Placing Agreement becoming unconditional in all respects (save only for Admission) and not being terminated in accordance with its terms.

General Meeting

A notice convening the General Meeting to be held at Telford House, Queensgate, Britannia Road, Waltham Cross, Hertfordshire EN8 7TF at 2.00 p.m. on 1 July 2013 will be set out at the end of the Circular.

Placing statistics

Expected timetable of events*

*If any of the details contained in the above expected timetable should change the revised times and dates will be notified to Shareholders by means of an announcement through the Regulatory Information Service. All events listed in the above timetable following the General Meeting are conditional on the passing of Resolutions 1 and 3 at the General Meeting.

Defined terms in this announcement not otherwise defined shall have the same meaning as is ascribed to them in the Circular.

- Ends -

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