Inland Homes PLC Construction contract and land transactions (6667J)

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RNS Number : 6667J

Inland Homes PLC

30 June 2017

30 June 2017

Inland Homes plc

Inland Homes to deliver 136 units in Alperton and agrees land sale with major housebuilder

Inland Homes plc (AIM: INL) ("Inland Homes", "the Group" or the "Company"), the leading brownfield regeneration specialist and housebuilder with a focus on the South and South East of England, announces the following updates demonstrating further progress with its construction and value enhancing planning activities and land sales:

   --     Entry into a construction contract for GBP29.5 million; 
   --     The sale of a site with planning consent for 58 residential units for GBP7.5 million; and 

-- Entered into an option agreement for a site included within emerging Local Plan with a potential for 150 residential units.

Construction contract

During the first half of the current financial year, the Group sold a subsidiary containing its 173 unit site in Alperton. The Group has now entered into a GBP29.5 million construction contract with a housing association to build 136 of these units, which now have a resolution to grant planning consent. The contract is expected to be concluded in approximately three years and is profitable, self-funding and cash generative.

This contract along with two contracts announced on Monday 26 June 2017, has been entered into by our new construction subsidiary, Inland Partnerships, which has been specifically set up to deliver residential units for housing associations and other residential landlords such as PRS funds or Local Authorities. Entering into such transactions has several benefits for the Group. First, the sale of the land happens immediately, crystallising recognition of the land margin and generating a cash receipt which can be applied to reduce any associated borrowings. Secondly, the client pays for the construction on a monthly basis which funds the Group's costs and enables the development to proceed without the Group incurring additional borrowings. Finally, construction income provides a good counter balance to speculative housebuilding or lumpier land sales in terms of revenues, cash flow and return on capital employed.

Following this contract in Alperton, as well as the previously announced two other contracts for the development of 85 residential units in Southall, West London and Queensgate in Farnborough, Inland Partnerships has now agreed construction contracts worth GBP41.5 million.

Land sale

Inland Homes has sold the 1.5 acre Beaumont Works site in St Albans for GBP7.5 million to a major housebuilder. The site comprises a Grade II listed former commercial unit, as well as an element of new build and parking for 60 cars. Inland Homes recently secured planning permission for the development of 30 new build apartments and 28 conversion units on the site.

Land option agreement

Inland has exchanged contracts on a nine acre Greenfield site in the affluent village of Datchet, Berkshire on a long term strategic option. The site has a draft allocation for 150 dwellings and has been included in the Royal Borough of Windsor and Maidenhead's emerging Local Plan which will be submitted to the planning inspectorate in October 2017 for examination, with a likely adoption in the Spring 2018.

Paul Brett, Land Director at Inland Homes, commented:

"The Group has had an extremely productive six months, concluding a significant volume of profitable land and building transactions for the business. The most recent land sale of Beaumont Works has achieved GBP2.1 million more than the EPRA valuation attributed to this site at 31 December 2016. Importantly, we have now announced a significant number of construction contracts for Inland Partnerships Limited, a new subsidiary of our business that will bring a variety of operational and material benefits to Inland Homes as we look to consistently deliver on our strategy and drive value for our shareholders."

Enquiries:

 
 Inland Homes plc:                             Tel: [phone] 
                                                762450 
 Stephen Wicks, Chief Executive 
 Nishith Malde, Finance Director 
 Paul Brett, Land Director 
 
 Stifel Nicolaus Europe Limited (Nominated     Tel: +44 (0) 20 
 Adviser & Broker):                             7710 7600 
 David Arch 
 
 
 FTI Consulting (IR & Media Relations):        Tel: [phone] 
                                                1000 
 Dido Laurimore 
 Claire Turvey 
 Richard Gotla 
  Polly Warrack 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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June 30, 2017 02:01 ET (06:01 GMT)