In the six months to 30th September 2018, Telford Homes increased its interim revenue by 31% to £129.6m and total pre-tax profit by 16% to £10.1m.
Telford Homes focuses on developing residential property in London suburbs. In the last three years it has concentrated on build-to-rent and is delivering more than 1,750 new homes for the private rented sector in the capital, working with various institutional partners.
In August 2018 it handed over The Pavilions, its first build-to-rent development, which was purchased by L&Q in 2016.
It is currently close to build completion of two schemes it is working on with M&G Real Estate in Carmen Street and Redclyffe Road, as well as a block at New Garden Quarter which was sold to Folio, a subsidiary of Notting Hill Genesis.
It is on the verge of closing a deal with Greystar for 894 build to rent homes at Parkside in Nine Elms and expects to start on site early in 2019.
It is also in negotiations with a major build-to-rent investor for the sale of 257 homes at Equipment Works in Walthamstow and has been chosen to partner a land owner to obtain planning consent for around 700 homes on a site in East London.
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Telford Homes has been hunting an institutional investor to back its build-to-rent activity for the long term and chief executive Jon Di-Stefano said a deal was imminent.
“Our belief is that such a relationship could lead to more efficient ways of buying land, the ability to design bespoke build to rent schemes that match our partner's requirements and a much shorter contractual process,” he said. “The aim is to create a significant long-term build-to-rent pipeline to the benefit of both parties. We anticipate being in a position to select a partner by the end of 2018 with a view to entering into a contractual arrangement and making a formal announcement early in 2019.”
Of the half-year results, he said: "Telford Homes made pleasing progress during the first half of the financial year, despite an increasingly uncertain economic and political backdrop. Our strategic shift towards purpose-built rental homes sold to institutional investors continues to be beneficial to our risk profile and growth potential whilst also being well timed in terms of the changing requirements of our typical customers in London.
“We are committed to our strategy which is built upon a fundamental undersupply of homes in non-prime locations in London and our belief that short-term market sentiment does not alter the long-term structural imbalance between housing supply and housing need. These factors, coupled with our excellent reputation as a trusted build to rent partner and the associated change in our business model, give us the confidence to look forward to more success in future years."
Net debt increased during the first half to £122.7m, up from £103.1m at the start of the financial year, pushing gearing up from 44.6% to 52.2%. This was attributed to building out certain individual sale schemes and had been expected.
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