Telford Homes lifts pre-tax profit to £18m

Telford Homes has announced a lift in pre-tax profit to £18m, comfortably ahead of the 2007 figure of £14m.

The east London house builder’s latest annual figures cover the 12 months to 31 March 2008.

Turnover jumped to £160m (comparable figure in previous year: £100m).

The latest result represents a profit margin of 11.3%, a figure many of the larger quoted house builders might wish they could flag up in the current economic climate.

Telford now has a gearing (ie. ratio of debts to assets) of 144%, up from the previous figure of 102%.

Telford’s strategy is to pre-sell properties as early as possible, in many cases before construction has commenced. At the end of March unrecognised revenue secured by contracts exchanged was £130m, higher than ever before.

“Our strategy has put us in a very strong position in the face of a weakening market,” said chairman David Holland.

“Since last summer, the company has been more cautious when investing in new land given the restricted availability and higher costs of mortgage finance for homebuyers. This prudent approach will continue.

“There remains a need to increase the supply of new homes over the next few years and this, together with ongoing growth and regeneration in East London, underpins the future success of Telford.”

During the year Telford sold:

• 520 private homes
• 500 affordable homes
• 10 commercial units

The totals above include 230 homes that were constructed in joint venture.

At the end of March a further 2,100 properties were under construction. Of these, 73% were financially secure as a result of contracts having already been exchanged.

The average price of the private homes sold in the year ran to £264,000 which was slightly ahead of the previous figure of £258,000.

Telford’s development at Papermill Place in Walthamstow incorporates 175 homes being constructed for East Thames Housing Group for £19m as well as 66 open-market homes being marketed as Vellum.

Five of the directors enjoyed pay of more than £200,000 with all of their earnings figures being enhanced by a bonus of £62,000.

Shareholders were paid a dividend of £3.5m, up on the £2.9m dividend in 2007.