Telford Homes Share Discussion Threads

[caradog] 20/10/2016 12:52

Monkeywrench
I'm glad to help you hone your multitasking skills. I was just pointing out that when you "copy, publish, republish or redistribute, communicate or disseminate to third parties full text articles", you are in breach of copyright.
Not the crime of the century, I admit, and FT group are unlikely to put a contract out on you, but it's still bad manners to take someone else's work and distribute it free on line without even attributing the article.

[monkeywrench] 20/10/2016 10:23

Caradog thanks. I don't often smile and shake my head at the same time,
on this thread.

[hillofwad] 19/10/2016 09:25

True ! Simon Thompson is mentioned elsewhere. The current property market jitters will be throwing up some very interesting opportunities for TEF with some large haircuts on pricing Maybe another United situation which is looking better by the day Just as the market tightening TEF with their conveyor belt of practical completions are becoming more liquid to take advantage of them Cash is king at times like these

[caradog] 19/10/2016 09:07

The author should at least be credited for his work.

[hillofwad] 19/10/2016 09:06

Na fe te Caradog ! Well since the same article appears across a whole range of chat sites Muscletrade I shouldnt fret too much. It was a well written, well presented accurate article unlike others who dont really dig very deep into TEF IC should be grateful as its free advertisng and maybe encourage others to sign yup!

[caradog] 19/10/2016 08:30

Muscletrade.
You may run into trouble if you cut and paste an entire copyrighted article. Attributed excerpts and quotes are usually OK, but any journalist will naturally object to their original work being distributed without consent, and his employers may take action.

[gp1948] 18/10/2016 16:37

Muscletrade - thanks for posting that piece - an interesting read and he make a number of very valid points. TEF does look extremely undervalued.

[muscletrade] 18/10/2016 13:56

Investor Chronicle plugging TEF with a well considered piece.

I also feel that investors are being overly cautious in their assessment of some housebuilders. I made a strong case to buy shares in east London builder Telford Homes (TEF:285p) at around the current level in late summer and last week’s trading update hasn’t altered my positive stance ('London property trading play', 22 Aug 2016).

The board revealed that since the start of September it has seen greater interest levels and more visitors to its central sales centre which has led to an increased number of reservations. This includes the sale of three of the remaining penthouses at the Horizons development in London’s docklands which have achieved an average price of over £1m, well in excess of the company’s usual price point. The average anticipated price of open market homes in Telford’s future pipeline is £517,000.

Given this focus on the lower end of the London housing market, profit expectations for the 12 months to end March 2017 are well underpinned. In fact, with over five months of the financial year still to go, Telford has already secured 95 per cent of the open market home sales for the 12 month period, prompting analyst Gavin Jago at brokerage Peel Hunt to maintain his pre-tax profit and EPS estimates at £33m and 35p, respectively, and pencil in a 10 per cent hike in the payout to 15.7p a share. Analysts Mark Hughes and Hannah Crowe at Equity Development have similar forecasts, having just initiated coverage. On this basis, the shares are rated on 8.25 times earnings estimates and offer a prospective dividend yield of 5.4 per cent.

The next significant site launch is at the company’s City North scheme in Finsbury Park, a joint development with The Business Design Centre in Islington. The 355-home development is now underway and is being funded by a £110m loan facility with LaSalle Residential Investment Fund. The scheme also includes 140,000 sq ft of commercial and leisure space and a new entrance to the underground station. It’s well worth noting then that around 150 of the units have already been pre-sold and form part of Telford’s £650m sales pipeline which underpins over half of its revenues for the next three financial years. At an average selling price of £800 per sq ft, and given its attractive location, I would anticipate solid sales demand at City North when the site is launched next month.

I would also flag up that the chronic supply shortage of housing in London reflects a significant gap between the need for homes and the numbers being built each year, an imbalance that will not ease anytime soon given the predicted population growth in London over the next decade. Furthermore, the collapse in sterling – buyers with euros and US dollars now get more than 20 per cent more UK property for their money than before the EU Referendum – has already stimulated interest at the top end of the London market and could attract rich
overseas investors to the high rental returns from Telford’s offering.

Institutional demand for PRS growing

Another positive is that Telford is currently in discussions with a prospective purchaser for the sale of its third private rented sector (PRS) development this year. The company has already offloaded around 300 homes in its pipeline with a development value of £130m to M&G Real Estate, and a subsidiary of L&Q, one of the UK's leading housing associations and one of London's largest residential developers. These deals reflect increasing institutional demand for high-quality, well-located developments to be 'built for rent'.

There is decent financial upside from PRS sales because assuming Telford achieves close to its target operating margin of 15 per cent, it will earn huge profits on the £130m of revenue generated from the two schemes. Profits will be recognised earlier because under contract accounting standards it is based on a percentage build basis rather than on legal completion of the schemes. Furthermore, Telford has no debt finance on its PRS developments, has recouped its land costs and is fully carried on funding, so will make a higher return on capital employed that on a normal housing development. Admittedly, it forsakes net margin to secure the sale of a complete development, but it’s good business as this mitigates risk.

Frankly, with Telford’s shares priced on 8.25 times earnings estimates, rated on a 5 per cent premium to end March 2017 book value estimates and offering a forward dividend yield of 5.4 per cent, investors are pricing in a sharp reversal of house prices at the more affordable end of the London market despite the strong supply-demand dynamics of the market segment Telford is targeting. And with analysts forecasting cumulative EPS of almost 140p over the next three financial years even in a flat London market, of which over 50p a share is earmarked for dividends, this progressive earnings profile is simply not being reflected in the current valuation.

Offering more than 30 per cent share price upside to my 370p target price, I continue to rate Telford’s shares a buy.

[speedsgh] 17/10/2016 13:25

New Equity Development research note...

Safe as houses -

[tudes100] 14/10/2016 06:08

www.brrmedia.co.uk/broadcasts/57f64b8bd87cac1d615551fb/telford-homes-trading-update

[shanklin] 13/10/2016 14:49

Anything is possible. So GFRD come up with a decent TS an the share price goes up 30%. Same strong TS here and nothing happens at all.

[larva] 13/10/2016 14:15

set a buy limit at 260

[gp1948] 13/10/2016 09:50

Bought some more of these this morning, sub £3. Excellent growth forecasts for the next few years and an absolute bargain at these prices IMHO.

Lots of stories in the press today about the post-Brexit wobble. I like this quote from the Mail:

"Despite dire warnings from Remain campaigners that Brexit would make house prices collapse, the housing market has bounced back from its ‘post-referendum jitters’, experts said yesterday.
Reports out today show a dramatic jump in mortgage lending and buyer confidence.
Last night, one MP said the upbeat findings undermined ‘ridiculous’ predictions that ‘the sky would fall in after the Brexit vote’."

[hillofwad] 13/10/2016 05:05

Ceritto

The penthouses were launched post Brexit which makes the news even better and are a real bonus prizes for the developer- a few extra quid on the spec for a massive uplift in price . One thing you can be assured is that as James points out there is no bull in TEF reports All reporting is conducted in a transparent understated style which is very unusual for an AIM company .All credit to them for that What you seeis what you get
There are a couple of shorters with postions in TEF Old Mutual being one Maybe just a hedge rather than any particular concerns about the company This is pinning the share price back as well The main problem that TEF in gaining any share price traction is their AIM status which means its automaticaly off some of the institutions shopping list

Some of the original stakeholders are reaching retirement so good reasons for keeping it AIM beacuse of Inheritance tax benefits .Maybe this might change in the futurel .The second phase of Finsbury Park launching in November which bodes well You can be assured that this wouldnt be undertaken unless the BODS were confident that ut will lauch well

[cerrito] 12/10/2016 22:03

My reading of the share price move today is that the good statement moved the price up in the morning only for concerns from the FX/interest rate markets to drive it down in the pm.
I was a bit suspicious of the wording they used on the sale of penthouses in Horizons and checked and there are only two left.

[hillofwad] 12/10/2016 19:44

James Yes its refreshing to receive continuing trading updates in a clear,transparent and unhyped way They have consistently delivered and we can be confident that they will make all the right moves in dealing with changing market conditions It seems that the threat of foreign investors walking away from completions has diminished which might have concerned investors bearing in mind their forward sales ,The sites under wraps were all secured sometime ago so plenty of HPI The small one on the Dogs with East End homes which went through the appeal process was actually secure dover 5years ago so that must have plenty of fat Fnatastic portfolio of consented site they have to deveop too Took my first holding here at 105p so I am a lucky boy Only wish that had been the case elsewhere!!

[james188] 12/10/2016 19:19

One of my most favourite shares.I was very happy to add further at just over £2.92 per share at the end of last week. A bargain, in my view.

I believe that the shares continue to be undervalued and that the market has applied a general Brexit discount to property companies concentrating on the London market, without factoring in the differentiating factors which are highly relevant to the Telford target market.

That said, I was also pleased to see that the company also seems to be doing well on the sale of penthouses in the Docklands Horizons development, where prices are significantly higher than the usual striking price for Telford properties.

A company that does what it says on the tin and has consistently delivered. It also communicates in a refreshingly clear way, with little or no spin. Even whilst sterling continues to tank and the Brexit implications become increasingly clear, I expect to continue adding.

[hillofwad] 12/10/2016 18:27

Weere wolfie it might take a bit of time to get back to level pegging but enjoy your dividends in the meantime Maybe one day one ofthe institutions might take a position They are the best in class

[werewolfie] 12/10/2016 18:14

Good news then. I bought in at £4.69. Been disappointed to see the share price slide.

[hillofwad] 12/10/2016 11:26

Sorry profits over the next 3 years with a whole host of schemes completing mostly fully sold

[qs99] 12/10/2016 11:25

government boost may help, decent update with FY expectations unchanged IMO, so with sentiment better IMO this may start to chug back to previous to Brexit levels DYOR

[hillofwad] 12/10/2016 11:25

Werewpolfie
Maybe the trading update had something to do with it! Confirming £650m of forward sales and reaffirming that the progressive profit exectations of £130m over the next year made prior to Brexit are still on track The BODS have never been known for overegging and have met expectations even during the last downturn With a portfolio of consented sitesthe majority secured some time ago and athird PRS sale in the offing things look pretty dandy for TEF even if private sales are hard won

[werewolfie] 12/10/2016 10:42

Why the recent increase in sp? Governments £5 billion boost I imagine

[amencorner] 12/10/2016 09:45

Yes, I am also very long term on this one: reinvesting dividends and happy to wait long term. Far too many people are in a rush to make a fast buck!