Released ahead of its November 29 interim results, Telford Homes, a developer, said its pre-tax profits for the six months to September 30 is going to be “significantly lower” than the second half of 2018, and will be lower than the 2016 figures.
However, Telford stressed that the fall in profits is only temporary, and emphasised that it was “entirely in line with expectations” and is purely due to the timing of development completions.
Telford also said that they are on track to exceed a £40m pre-tax profit for the year to 31 March 2018, in accordance with market expectations.
With almost 500 built-to-rent homes in development, Telford is expecting a further 900 to be added to the pipeline following a pre-construction agreement signed with Greystar this June.
Of the existing pipeline of around 4,000 new homes, the group expects an average open market property to fetch £530,000.
Telford said that its long-term growth will be sustained by the “chronic lack of supply” in London homes, as well as the increasing institutional investment in the build-to-rent market, which involves developing purpose built blocks of rental properties
Jon Di-Stefano, the chief executive of Telford Homes, said: “We are focused on reducing risk through forward sales, limiting our need for external debt finance and delivering higher capital returns and this fits perfectly with our strategic move into the build to rent sector. I expect more build to rent transactions as institutional demand continues to grow alongside continuing open market sales at our well located developments.”
At the time of writing, shares for Telford Homes had dropped 2.17% to 399.40p.