Telford Homes enjoys 31% profit rise

Telford Homes has unveiled an increased pre-tax profit of £18m, up by 31% on the previous year.

Telford is a residential developer in East London and much of its work involves regeneration projects undertaken within public sector partnerships.

Turnover in the 12 months to 31 March 2008 was well ahead at £160m.

The previous year’s turnover of £100m generated a pre-tax profit of £14m.

Andrew Wiseman, chief executive, said: “Our robust business model, which we de-risk through pre-selling homes, has meant that Telford Homes is in a strong position, in particular with £125m of unrecognised secured revenue that we carry forward into the 2009 financial year and beyond.”

The national housing market might have been hit, but Wiseman says “the need for new housing in East London, together with an ongoing programme of regeneration, gives me confidence that the medium to longer term outlook for Telford Homes remains positive.”

Many of Telford’s properties are sold before construction has started.

Contracts were exchanged on 523 open-market private homes, 502 affordable homes and 10 commercial units.

Within this number are 230 homes being constructed under joint ventures where Telford takes a 50% cut of the profit.

The number of open-market private homes sold was up by 9%. The average price inched forward from the previous figure of £258,000 to £264,000.

Telford has cut back its investment in is development pipeline in the last few months as “protection of cash has become our immediate priority”.

Sites which have a lower up-front new equity requirement are the order of the day.

The most recent acquisition is a parcel of five sites in Southwark in partnership with Family Mosaic Housing Association which are expected to deliver over 100 new homes.

Three of the sites are already under construction while the other two are hanging on for full planning permission to be granted.

Telford comments: “Increasing bureaucracy and the need to satisfy several different bodies with competing views have led to delays in the development of some sites” though it is hoped that construction will get under way during 2008.