Trading Statement

RNS Number : 6435U

Inland Homes PLC

16 July 2018

 

16 July 2018

Inland Homes plc

Trading Update

Inland Homes (AIM: INL) ("Inland Homes", the "Group" or the "Company"), the leading brownfield developer, housebuilder and partnership housing company with a focus on the south and south east of England, provides the following update on trading ahead of its preliminary results for the 12 months ended 30 June 2018, which will be announced in September 2018. Trading in the period has been in line with the Board's expectations.

Operational highlights

	30 June 18	30 June 17	Change
Open market completions (including joint ventures)	275	188	+46.3%
Partnership housing equivalent units	82	37	+121.6%
Revenue	£150m	£90m	+66.7%
Cash	£40m	£26m	+53.8%
Net debt	£80m	£68m	+17.6%
Forward sales (at trading update)	£20m	£26m	-23.1%
Land plots sold	837	780	+7.3%
Total land bank plots (at trading update)	6,808	6,776	+0.5%
Of which consented	1,547	2,105	-26.5%

Current Trading

It has been another successful and very active period for Inland Homes as management continues with the implementation of its expansion strategy and the diversification of the Company's revenue streams which include housebuilding, specialist brownfield site regeneration, land sales, partnerships with housing associations and exposure to the Private Rented Sector ("PRS").

Growth in both revenues and homes delivered and under construction has been strong and of particular note was the strategic and meaningful expansion of our partnership housing activities, including a £65 million contract secured with A2 Dominion, a top ten housing association which lifted our partnership housing order book to approximately £100 million.

In May, we formed a strategic relationship with a PRS focused fund, KCR Residential REIT ("KCR"), to gain exposure to this rapidly emerging sub-sector at an attractive entry point, through an interest in the delivery of high quality, low-to-mid priced housing for rent. We have since completed the sale of two commercial properties and 27 residential units to KCR, with further transactions in the pipeline.

In a milestone for the Company, we also submitted our largest planning application to date on a 30-acre brownfield site in Cheshunt, Hertfordshire for 1,853 homes and a significant office, retail and leisure element. We expect to secure consent for this extensive project during 2018.

Negotiations are continuing with the local authority on our planning application for 350 homes at Wilton Park, Beaconsfield. While the site is allocated for development and discussions are progressing very well, the process is slow due to the complexity of the negotiations with the planning authority.

The land team have focused on augmenting our strategic land bank, with some exciting new opportunities secured at attractive discounts to market value. We now have 24 options covering approximately 380 acres of potential development land.

Market demand for consented housebuilding land remains strong with 837 plots sold in the year to 30 June 2018. Of these, 480 plots were to private housebuilders and 357 plots to housing associations.

Outlook

Contrary to what market commentary might indicate, customer demand for our good quality, affordably priced homes (with an average selling price of £293,000 (including joint ventures)) remains strong and the average sales rate per active site during the second half of the year was 1.34 units.  Low interest rates and Help to Buy continue to underpin our market place.

We are continuing to see strong demand on our land sales and where appropriate we are targeting these sales to the major housing associations and where our partnership housing team can secure the related build contract as part of the transaction.

We see the growth in the PRS market as an exciting opportunity for Inland Homes. Several of our projects, particularly Cheshunt Lakeside, where planning has been applied for 1,853 homes next to the station (30 minutes to Liverpool Street Station and potentially on Cross Rail 2), we believe are particularly appropriate for PRS. We will be seeking a suitable partner for this project in the near future.

Supporting the growth of the Company, in June we announced the appointment of two new Non-Executive Directors, Laure Duhot and Brian Johnson, whose operational and financial experience will be invaluable moving forward.

Stephen Wicks, Group Chief Executive commented:

"Following the extensive progress we have made over the past 12 months, Inland now has a very well balanced business model. Strategically, our focus has always been on suburban locations in and around the South and South East of England, where we provide good quality affordably priced homes, and we therefore have no exposure to the weakening central London market.

"The core business of brownfield land acquisition and the growing greenfield strategic land business is generating significant opportunities to provide new outlets for our private housebuilding, as well as partnership housing transactions where we can also secure the build contracts from housing associations.

"With some major planning consents on the horizon and a strong forward order book the Group is in an advantageous position to propel significant further growth for our shareholders."

Market Abuse Regulation

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Enquiries:

Inland Homes plc:	Tel: [phone]
Stephen Wicks, Chief Executive
Nishith Malde, Finance Director
Gary Skinner, Managing Director
Panmure Gordon (UK) Limited	Tel: [phone]
Dominic Morley Erik Anderson
FTI Consulting:	Tel: [phone]
Dido Laurimore
Claire Turvey Richard Gotla

Notes to Editors:

Incorporated in the UK in 2005, Inland Homes plc is an AIM listed specialist housebuilder and brownfield developer, dedicated to achieving excellence in sustainability and design.

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.

The Company is committed to extensive public and community consultation in order to ensure that, where possible, local community needs and objectives are met.

Inland's aim is to create sustainable communities and homes which set a benchmark for all future developments in the South of England. The Company is always looking for brownfield sites without planning permission for future development.

For further information, please visit the Inland Homes website at www.inlandhomes.co.uk.

 

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