Telford Homes expects to announce record revenues and profits for the year to 31 March 2017, ahead of market expectations.
The housebuilder, which focuses on non-prime London, said in a trading update it was on track to exceed £40m of profit before tax in the year to 31 March 2018 and £50m in the year to 31 March 2019.
Build-to-rent is now a significant focus for the group, with a current pipeline of 483 homes. Its total development pipeline exceeds £1.3bn and represents more than four times revenue expected in the year to 31 March.
Normal market demand has continued including from individual investors, both in the UK and overseas, looking for a high quality product in the right location and at the right price, the developer said.
The group’s last significant launch was City North in Finsbury Park in November 2016, which achieved 73 new sales at a combined value of more than £43m. Subsequent to City North, new developments which would have been launched have instead been sold for build-to-rent.
Going forward, the housebuilder sees continued opportunity for growth in non-prime London due to the lack of supply of new homes. With the increased focus on build-to-rent the company hopes to be able to accelerate growth through de-risked sales requiring reduced equity and debt.
Gearing at 31 March 2017 is expected to be historically low at circa 10%. Telford Homes expects to develop even closer relationships and longer term partnerships with specific build-to-rent investors in the coming months as part of the plan to grow this area of the business.
The company’s final year results for the year ended 31 March 2017 will be released on 31 May.
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