(adds detail, share price)
LONDON (Thomson Financial) - East London residential developer Telford Homes
Plc. said it expects full year results in line with market expectations after
strong trading in the second half but added that current market conditions would
affect it in the new financial year.
The housebuilder, which focuses on the regeneration of brownfield sites in
the East and North London area, said the strong second half was underpinned by
"continued success" in pre-selling homes to the investor market at an early
stage in the development process.
"Recent development launches have gone well and as a result we expect to
meet market expectations for the year, following a period of continued strong
growth," chief executive Andrew Wiseman commented, while at the same time noting
the group's "cautious" approach to the new financial year.
Telford said that despite a "challenging" national housing market in the
last six months, it has continued to pre-sell homes in East London and contracts
have been exchanged for the sale of 85 pct of the 1,700 homes that have been
under construction for more than three months.
Three new development sales launches have taken place with "excellent"
results in the last three months despite the lack of confidence in some aspects
of the housing market, the company said, adding that the key issue now is the
restricted availability and higher cost of mortgage finance.
"This is limiting the rate of sales in the short term, both to
investors and owner-occupiers, but the company will be able to time new sales
launches appropriately given the level of pre-sales already achieved," it said.
"The number of properties pre-sold on current developments puts Telford Homes in
a very secure position going forward."
Due to the uncertainty in the housing market and the associated mortgage
finance issue, Telford has taken a "prudent" approach to investment in land in
the last six months and sees protection of cash flow as a priority. This has
meant reduced overall expenditure with even greater focus on partnerships and
joint ventures with housing associations and stock transfer organisations, it
said.
"Current market conditions will affect the company in the new financial year
for as long as they continue but the medium to longer term outlook remains
positive," Telford said. "The regeneration of East London is ongoing, supported
by the Olympic development, and demand for rental properties in the area is
still strong".
At 8:04 a.m., shares were up 2 pence at 159 pence, or 1.27 percent higher.
marc.roca@thomson.com
mr/slm/mr/slm
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