DEVELOPING IN LONDON PRELIMINARY RESULTS 31 MARCH 2015
CITYSCAPE E1 01 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Highlights • Focused on affordable locations in London where demand exceeds supply • Strong performance at every sales launch with 661 sales in the year • Total forward sales now over £550 million, more than three times current annual revenue • Development pipeline of £1.07 billion, an increase of more than 70% in two years • Profjt before tax ahead of market expectations at £25.1 million • Continued improvement in gross and operating profjt margins • Proposed fjnal dividend of 6.0 pence making 11.1 pence for the year • New four year £180 million revolving credit facility • Outcome of Election has provided certainty and stability • Very confjdent in long term prospects for Telford Homes 02 www.telfordhomes.london
03 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Forward sales STRATOSPHERE E15 • Contracts exchanged for sale of 661 open market properties in the year (2014: 515) • Strong sales rate continued into new fjnancial year • Increase in forward sold position to over £550 million (2014: £341 million) • Record high for Telford Homes and more than three times current annual revenue • Security over future cash fmows and exceptional visibility over future profjts • Immediate benefjts in terms of deposits received in advance of build completion • Minimum 10% deposit on exchange and typically another 10% a year later • Total deposits taken in advance of £63.7 million (2014: £45.3 million) • Recent sales launches have continued trend evident for last three years 04 www.telfordhomes.london
MANHATTAN PLAZA E14 05 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Sales performance • Launch of Manhattan Plaza in April 2015 secured over 70 sales in three weeks • Quarter sold to UK investors and remainder sold overseas • Close to Canary Wharf with new Crossrail station due to open in 2018 • Smaller UK launches earlier in 2015 also exceeded expectations • Phenomenal success with Stratosphere in late 2014 securing £110 million of revenue • Continued strong performance from on-site sales centres • Less than 50 properties currently released for sale • No unsold completed homes • Bermondsey Works next signifjcant launch in June 2015 06 www.telfordhomes.london
BERMONDSEY WORKS SE16 Breakdown of open market contracts exchanged in the year to 31 March 2015 38% 49% 13% UK investors Owner-occupiers Overseas investors 07 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Our customers • Split of sales refmects Group’s incredible success at forward selling its homes • Taking advantage of continued investor demand based on a thriving rental market • Homes designed to appeal to both tenants and owner-occupiers • Both markets have remained very strong in the last year • Telford Homes will continue to sell a proportion of its homes to overseas investors • Investors achieving rental yields of 4% to 6% and do not leave properties empty • Strong brand and reputation for quality leading to many repeat purchasers • Monitoring increasing emergence of institutional investment in the private rented sector 08 www.telfordhomes.london
THE JUNCTION E1 09 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Mortgage finance • Availability of mortgage fjnance has improved for both investors and owner-occupiers • Mortgage rates have decreased whilst base rate remains low • Typical loan to values remain below 80% for our customers • First fjve sales under ‘Help to Buy’ scheme • Impact of this scheme still not expected to be signifjcant for Telford Homes • Mortgage providers continue to carefully control applications • Very different environment to 2006 / 2007 • Affordability constraints have tempered excessive price infmation as expected • Modest price growth over the last six months in the Group’s locations 10 www.telfordhomes.london
VIBE E8 11 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
London market • Our business revolves around the fundamental strengths of London • International reputation, economic performance and improving transport network • Crossrail directly benefjts a number of the Group’s locations • Demand for somewhere to live in London far exceeds the supply of new homes • This imbalance is key reason behind our plans to increase output over the next few years • Prime London markets have cooled in recent months • Telford Homes operates in relatively affordable areas of inner London • All developments have an average price of under £1,000 per square foot • Building where people want to live and can afford to live 12 www.telfordhomes.london
Group income statement March March 2015 2014 Revenue £173.5m £140.8m Gross profjt £53.9m £42.1m Gross margin adjusted for interest 32.4% 31.9% Operating profjt £28.0m £21.2m Operating margin adjusted for interest 17.5% 17.1% Profit before tax £25.1m £19.2m EPS 33.2p 26.4p Dividend per share 11.1p 8.8p AVANT-GARDE E1 13 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Profits and margins • Profjt before tax has increased tenfold since 2011 • Margins ahead of last year and in excess of expectations • Commercial sales at strong prices and build costs less than prudent estimates • Margins expected to return to normal levels in the future • Previous strong price growth tempered by overage arrangements with land vendors • Modest current price infmation offset by increasing labour and material costs • Costs under control and anticipated in forecasts • Continue to monitor trends and react accordingly • Strong supplier relationships and placing orders as early as possible • Pre-tax profjts expected to reach circa £40 million by 2018 • Profjts may fmuctuate around an upward trend but dividend expected to remain progressive 14 www.telfordhomes.london
Group balance sheet STRATFORD PLAZA E15 March March 2015 2014 Non current assets £1.9m £2.2m Inventories £277.2m £173.1m Cash £39.7m £33.0m Other current assets £11.5m £6.6m Borrowings (£92.6m) (£28.1m) Other liabilities (£117.3m) (£81.4m) Net assets £120.4m £105.4m (Net debt) / net cash (£52.9m) £4.8m Gearing 43.9% 0% 15 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Cash and debt finance • New £180 million revolving credit facility extending to March 2019 • Club facility involving RBS, HSBC, Santander and AIB • Provides greater working capital fmexibility • Ability to act more swiftly on site acquisitions • Secured on improved terms • Gross drawn debt of £95 million at 31 March 2015 leaving headroom of £85 million • Net debt and gearing expected to increase further • Comfortable with anticipated levels of debt given forward sold position • Cash position boosted by deposits received 16 www.telfordhomes.london
HORIZONS E14 17 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Development pipeline • Development pipeline exceeded £1 billion for the fjrst time in 2014 • This followed a number of signifjcant acquisitions • Including purchase of 5.5 acre site in Stratford in a JV with Notting Hill Housing Group • More opportunities acquired since reaching this milestone • No shortage of development sites in Group’s locations • Unlocking these sites is part of the challenge of increasing the supply of homes • Excellent relationships with landowners and reputation for maximising value • Development pipeline of £1.07 billion of future revenue at 31 March 2015 • Over 70% increase in just two years and more than six times current annual revenue 18 www.telfordhomes.london
HACKNEY SQUARE E9 19 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
The planning process • Group owns sites without planning and will continue to acquire more • Knowledge of process and ability to work in partnership removes majority of risk • Strong relationships with affordable housing providers assist in delivering policy compliant schemes • Planning process remains challenging and time consuming • Can result in delays to the Group’s expected development programmes • Time taken to achieve consent at Caledonian Road is an example of typical issues faced • Government and Greater London Authority both recognise need to increase supply • System needs reform but small adjustments will make a big difference 20 www.telfordhomes.london
PARKSIDE QUARTER E14 21 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
Operations • As business grows, economies of scale become evident • Average development size has increased • By end of 2015 will be constructing over 2,200 homes across 16 developments • Two years ago this was just under 1,700 homes across 22 developments • Operational structure is changing to accommodate further growth • Small number of redundancies at a senior level • Production under one Managing Director with support from extended management structure • Restructure is needed to ensure Telford Homes can step up to next level 22 www.telfordhomes.london
PARLIAMENT HOUSE SE1 23 TELFORD HOMES Plc PRELIMINARY RESULTS 31 MARCH 2015
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