13 February 2014
Inland Homes PLC
("Inland Homes" or the "Group")
Inland Homes identifies 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 houses for private sale or selling consented land onto other developers.
The Board of Inland Homes today provides the following update on trading ahead of its Half Year Results announcement for the period ended 31 December 2013, which will be announced on 31 March 2014.
Inland Homes has performed strongly in the first half of the current financial year, with 47 (2012: 15) residential units being completed (including the units being managed on behalf of Drayton Garden Village Limited ('DGVL')), delivering gross revenue of £12.7m (2012: £3.12m), which includes revenue to DGVL of £4.8m (2012: nil). The Group has experienced improved margins on the sale of these homes as a result of achieving prices in excess of budget. The Group has also seen strong demand for consented land from housebuilders seeking to replenish their stocks and currently has £11.6m of land sales exchanged or under offer with further offers pending.
Land bank increased in line with Group strategy; continuing strong demand for consented land
Since the announcement of Inland Homes' preliminary results on 3 October 2013, despite demand increasing for brownfield sites with potential for residential development, the Group has continued to prove successful in securing new lucrative opportunities. It has secured approximately 650 plots on seven more sites, in areas such as Bournemouth, Henley, Southampton, High Wycombe and Colchester, increasing the land bank of residential plots owned, managed, contracted, controlled or where terms have been agreed from 2,306 at 3 October 2013 to 2,917 today. This includes 1,079 plots with planning consent for residential units.
Expansion of house building activity delivering results
The Group's house building activity is gaining momentum with 495 units under construction across eight sites (including the construction of 156 units managed for Drayton Garden Village Limited). Contracts have been exchanged for the sale of 59 units at West Plaza in Ashford, Middlesex for £10.8m and for 107 units at Drayton Garden Village for £21.0m. Demand for the Group's homes is very strong with forward sales either agreed or contracted currently standing at £48.6m (including sales managed on behalf of DGVL), a record level for the Group.
Strong balance sheet maintained with substantial capital reserves to fuel growth
The Group had cash balances of £8.94m at 31 December 2013 (30 June 2013: £12.15m), after having increased the land and work-in-progress by approximately £22m. Net borrowing, which includes the Zero Dividend Preference Shares, was £14.6m as at 31 December 2013.
DGVL paid a further £2.0m of the outstanding deferred consideration resulting in an increase in Inland Homes' profit share from DGVL to 79.05 per cent. The final balance of £4.7m is expected to be paid in March 2014, after which Inland Homes' profit share will increase to 90 per cent.
Well placed to exploit market opportunities
The Group continues to experience strong interest from developers, housing associations and investors in the private rented sector for plots with planning consent and is expecting to enter into a number of land sales together with bulk sales of end units in the current financial year.
Stephen Wicks, Inland Homes' Chief Executive commented:
"I am delighted to see Inland performing well on all fronts.
"Our housebuilding activities are focused on prime sites in the south and south east of England with very strong interest in our homes from investors and the public, as evidenced by our record forward sales position.
"Our unique business model that generates cash and profitability from land sales whilst increasing our housebuilding programme and the size of our residual land bank is working extremely well.
"Despite the considerable increase in the scale of Inland Homes' business in this financial year, we have managed to keep our gearing to relatively low levels.
"Inland is in great shape to deliver substantial growth in the remainder of this financial year and beyond.
"This momentum would not be possible without the dedication and hard work of the Inland team, for which I am extremely grateful."
AIM: Ticker: INL
Inland Homes plc
Blythe Weigh Communications
Stephen Wicks, Chief Executive
Nominated Adviser & Broker
IR & Media Relations
Nishith Malde, Finance Director
Paul Brett, Land Director
Matthew Robinson or
Paul Weigh: 07989 129658
Halimah Hussain: 07725 978141
Tel: 44 (0) 1494 762450
Simon Starr or Brian Patient
Tel: 44 (0)20 7138 3204
Tel: 44 (0) 20 7220 0500