Telford Homes profit to surge as it focusses on build-to-rent

London-focussed residential property developer Telford Homes updated the market on its trading on Wednesday, saying it anticipated record revenue and profit for the year ended 31 March.

The AIM-traded firm said profit before tax was expected to be up by more than 30%, slightly ahead of current market expectations.

It said its strong performance was reflected in a three percentage point improvement in gross and operating margins.

Telford also claimed a 100% customer recommendation rate in 2017, which the board said demonstrated its commitment to quality and service.

The company said there remained a “robust market” for its homes in London, assisted by a broad mix of sales between build to rent, individual investors, owner-occupiers and housing associations.

More than 100 homes were sold at the launch of New Garden Quarter in Stratford in January, the company highlighted.

It also reported continuing demand from build-to-rent investors, with the group exploring ongoing partnerships to enhance supply to the sector.

More than 2,900 homes were currently under construction, Telford confirmed, with scope to “significantly increase” that in the coming years.

Its total development pipeline stood at more than 4,000 homes, with several new opportunities being actively pursued.

A new, longer-term £210m corporate loan facility was negotiated at lower interest rate during the year.

Telford said its strategy was focussed on expanding its build-to-rent output, to support further growth and enabling it to deliver more of the homes that it believes London needs.

“Telford Homes continues to perform well and I expect to once again report record revenue and profit for the year to 31 March, said chief executive Jon Di-Stefano.

“As we increase the scale of the business, our growth is underpinned by the lack of supply of new homes in London and demand for our product at more affordable price points remains strong.

“Build to rent is the most exciting part of our business in the near term and I believe our increased focus on this sector will drive the next phase of our growth and bring even greater success.”

Telford said it would release its final results for the year ended 31 March on 30 May.