PRELIMINARY RESULTS 31 March 2011 GREENWICH CREEKSIDE properties, - - PowerPoint PPT Presentation

PRELIMINARY RESULTS 31 March 2011

GREENWICH CREEKSIDE

www.telfordhomes.plc.uk

01

• Number of open market completions reduced to 281

as expected (2010: 389)

• Profit before tax in line with market expectations
• Contracts exchanged for the sale of 368 open market

properties, an increase of 45% (2010: 253)

• Strong demand for early sales of future developments,

particularly from purchasers in the Far East

• £70 million banking facility finalised in March 2011
• Final dividend of 1.25p making 2.5p for the year

(2010: 2.0p) reflecting stronger long term prospects

Overview

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

02

March 2011 March 2010 Revenue £121.1m £159.3m Gross profit before exceptional items £15.4m £21.0m Gross margin adjusted for interest 15.1% 16.5% Operating profit before exceptional items £3.4m £9.4m Profit before tax and exceptional items £2.5m £8.1m Exceptional items £0.5m (£0.8m) Profit before tax £3.0m £7.3m EPS 4.8p 13.7p Dividend per share 2.5p 2.0p

Group income statement

www.telfordhomes.plc.uk

03

• Half way through a two year period of reduced output
• f finished open market homes
• Decline in completions and revenue is due to supply rather

than lack of demand

• Sales performance has exceeded expectations for off-plan

developments to be completed mid-2012 to mid-2014

• Gross profit margin before loan interest down to 15.1%

due to the switch to affordable housing and impaired

• pen market developments
• Reduced supply and lower margins will continue to

31 March 2012 such that the Board expects profit before exceptional items to be similar year-on-year

• The effects of both will have substantially worked through

the business by the end of the new financial year

Revenue and profit

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

QUEEN MARY’S GATE, WOODFORD

www.telfordhomes.plc.uk

05

• Rate of sales of finished homes to UK buyers has

remained steady and visitor levels have been consistent during the year

• Final phase of Queen Mary’s Gate finished late in 2010

and there are fewer than 60 homes left to be sold out

• f nearly 500 across the development
• Acquired remaining 50% of Greenwich Creekside in

September 2010 and handovers are well underway

• n the first phase
• Availability of mortgage finance for new build

properties remains a significant restriction on demand

• Signs of improvement in the number of mortgages

available but CML expects gross lending for housing to be unchanged in 2011

UK sales and mortgages

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

MATCHMAKERS WHARF, E9

www.telfordhomes.plc.uk

07

• Overseas launches including Matchmakers Wharf,

the Hawksmoors and Avant-garde have been very successful

• Primarily sold in Hong Kong, Malaysia and Singapore
• Avant-garde launched in Far East in April 2011 with

120 homes sold

• Equally strong off-plan demand in London such that
• ver 170 of the 257 open market homes have been

sold in just a few weeks

• Handovers at Avant-garde will commence from

late 2013

• Majority of overseas sales are secured with

a 20% deposit

• Group will continue to market appropriate

developments overseas to secure revenue that will be recognised in future years

Overseas sales

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

LANRICK ROAD, E14

www.telfordhomes.plc.uk

09

• Completed first four developments under grant

agreement with the HCA

• Received £55.1 million out of total secured allocation
• f £72.9 million
• Significant cuts in future grant funding
• Overall funding of affordable housing uncertain

with ‘affordable rent’ tenure not yet tested

• Housing associations and local authorities will be

important in maximising the value of affordable housing and ensuring developments remain viable

• All developments currently under the Group’s control

either entirely open market housing or with a secured revenue stream contracted for the affordable housing

Partnerships and affordable housing

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

VELLUM, WALTHAMSTOW

www.telfordhomes.plc.uk

11

• Three and a half year £70 million facility signed on

31 March 2011

• Club of three banks being RBS, HSBC and Santander
• Secured against a portfolio of land and development sites
• Interest at 3.5% over LIBOR and 1.25% arrangement fee
• Funds advance at 60% of cost
• Initial drawdown leaves headroom of £38.1 million to

be utilised over the next few years

• Process involved a year of extensive investigation of

every aspect of the business and its financial position

£70 million banking facility

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

12

March 2011 March 2010 Non current assets £0.4m £0.5m Inventories £125.2m £120.0m Cash £18.8m £33.6m Other current assets £14.2m £7.6m Borrowings (£64.9m) (£70.8m) Other liabilities (£29.0m) (£27.8m) Net assets £64.7m £63.1m Net debt £46.1m £37.2m Gearing 71% 59%

Group balance sheet

www.telfordhomes.plc.uk

13

• Net assets per share of 132.1 pence
• Share price on 31 March 2011 was just 58% of that

value per share (31 March 2010: 71%)

• Cash balances remain strong at £18.8 million inflated

by first drawdown on new facility

• Gross borrowings reduced with net debt at

£46.1 million and gearing at 71%

• Two significant sites outside of main banking facility
• Greenwich Creekside fully funded by RBS and

Avant-garde funding has been credit approved by HSBC assisted by new JV partner, The Willliam Pears Group, and substantial pre-sales

Assets and borrowings

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

CHANDLERS KEEP, E1

www.telfordhomes.plc.uk

15

• Impact of not investing in land during the recession

now being felt in reduced output

• Group has been buying land during the year purchasing

eight sites to provide 141 open market homes

• Placing in 2010 and new banking facility provide equity

and debt for future investment to add to current development pipeline of 1,904 properties

• Limiting exposure to planning risk given uncertainty
• ver future policy and ‘localism’
• New Homes Bonus is valuable to local authorities and

it is hoped this will encourage a pragmatic approach to planning policy

• All current developments have planning permission
• Working with several landowners to secure planning

for developments not yet under the Group’s control

Land acquisition

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

16

KINETICA, E8 KINETICA, E8

www.telfordhomes.plc.uk

17

• Award winning developments including two special

commendations from the London Evening Standard 2010 Homes and Property awards and two NHBC awards

• Independent survey of customers throughout 2010

resulted in a 97% recommendation rate

• Andrew Wiseman standing down as Chief Executive

before returning as Executive Chairman in January 2012

• David Holland to become Senior Non-Executive Director
• Jon Di-Stefano appointed as Chief Executive from

July 2011

• Katie Rogers to be appointed as Financial Director from

AGM on 14 July 2011

Operations and board changes

TELFORD HOMES Plc Preliminary Results for the year ending 31 March 2011

AVANT-GARDE, E1

www.telfordhomes.plc.uk

19

• Number of open market homes exchanged increased

by 45%

• Overseas sales very successful continuing into new year

with Avant-garde

• Reduced output and margins will have substantially

worked through the business by 31 March 2012

• Pre-sales secured for future years
• Finance in place to add to the development pipeline
• Market in East London remains robust with ongoing

undersupply of new housing and the Olympics just a year away

• Longer term prospects for Telford Homes remain strong

Current trading and outlook

Telford Homes Plc First Floor Stuart House Queensgate Britannia Road Waltham Cross Hertfordshire EN8 7TF