Inland Homes Share Discussion Threads

[spud] 08/7/2019 08:37

Indeed. They really can't do anymore than they're doing - Growing the business, growing the dividend & leading by example by investing their own money.If the seller doesn't recognise the signs then it's probably better he wasn't invested in the Market.This is one gigantic slam dunk if ever I saw one!spud

[igbertsponk] 08/7/2019 07:43

CEO and CFO think the company is still very cheap. Both adding.

[spud] 05/7/2019 17:25

Looks as if the seller managed to get 45k away today. spud

[cerrito] 03/7/2019 23:03

davidosh, as a holder of both INL and TEF I see little read across for INL.
As you say TEF have focused on a sector who is currently very fashionable but whose business model has yet to develop a trackrecord here in the UK.
INL are far more diversified and IMO do not have a leading position in any segment, although of course have two good sites.
Tef's management are going to work for CBRE. My reading of them is that they are temperamentally up for working for the acquirer..I do not see this being the case of INL management, who temperamentally want to be owners.
I am reminded that at least two INL AGM's Wickes made unnecessarily disparaging comments on TEF.

[spud] 03/7/2019 20:24

Who knows. What is for certain is that it's holding the price back and has been for ages, probably years. If there was more Institutional interest, the overhang would have been taken out ages ago, but there isn't. I guess looking on the bright side, it allows forward thinking investors the time to accumulate a sizeable holding on the cheap, but on the flip, it is exceedingly frustrating. spud

[p1966] 03/7/2019 17:37

Crikey, another 250k sell, late reported. This DS business might have been entertaining to start off with, but I've got a bit fed up with it now, LOL.Surely there can't be many more?!Phil

[leading] 03/7/2019 10:29

Thanks to all posters for some useful analysis on this board over the past week or so.

There is compelling value here, whether the company decides to continue to trade or just dispose of its assets, which must be attractive if the market continues to apply such an enormous discount to NAV.

Anyway, I have held these for a couple of years, but increased my stake by 50% today.

[davidosh] 03/7/2019 09:07

CBRE to buy UK-listed residential developer Telford Homes

Tie-up values Telford’s equity at more than £200m


Philip Georgiadis 13 minutes ago

CBRE, the world’s largest real estate services firm, has agreed to buy British residential developer Telford Homes in a deal that values its equity at £267m.

The New York-listed property group said on Wednesday that it has agreed a cash deal to pay 350 pence per share for Telford, which represents an 11 per cent premium to its Tuesday closing price of 306 pence.

The deal values Telford’s equity at approximately £267m. Including net debt, the enterprise value of the deal is roughly £340m, according to FactSet data.

Telford Homes’ chairman said the deal represents “fair value” in light of the group’s market positioning, its portfolio and pipeline and “the current operating environment.” The group’s share price has fallen from highs of nearly 500 pence in 2015.

The UK housing market has slowed in recent years, with the London market particularly badly affected by changes to taxation and the impact of Brexit-related uncertainty.

Andrew Wiseman said: “The board remains confident in the long-term prospects of the business, however the board also recognises the risks posed by the political and macroeconomic environment”.

Aim-listed Telford was established in 2000 and develops residential housing across London, with a development portfolio in process of £1.3bn. It has recently shifted to focus on the build to rent sector, which CBRE expects to grow substantially in the coming years.

Bob Sulentic, president and chief executive of CBRE, said: “The UK is in the early stages of a secular shift toward institutionally owned urban rental housing, similar to what we have seen in the US over the last two decades. Telford Homes is well positioned to lead this trend.”

Telford would operate as a stand alone business within CBRE subsidiary Trammell Crow Company if the deal completes.

[davidosh] 03/7/2019 08:59

Telford Homes TEF have had an agreed bid at a 5% premium to their NAV this morning. Any read across ? The bidder seems keen on the PRS element which is not yet a large part for INL though.

[spud] 02/7/2019 17:41

Looks as if the seller only managed 35k today. Can't have too many left hopefully....spud

[pavey ark] 02/7/2019 08:59

pl1001, no problem and I certainly haven't been upset by anything you said.

[pi0110] 01/7/2019 23:43

Scburbs

Appreciate you taking time to explain NAV but I would have thought it obvious from being able to discern EPRA NAV from EPRA NNNAV that I may be at least a little bit clued up on investing, but thank you all the same.

[pi0110] 01/7/2019 23:36

Pav

Just pointing out that EPRA NAV does not "normally" include debt, apologies if that has offended anyone but I think it is important to get this sort of thing into perspective and by doing so we all learn a little bit more.

Yes I'm not a fan of Wicks but I think I know value when I see it which is why I have a small holding in INL. My valuation is predicated on your example although I would ascribe a 30% valuation to GDV for the plots so a bit more optimistic than you.

I think however, that it is important to look at both negative and positive sides of an investment. I'm sure you would agree that looking at investments with just rose tinted glasses will lead to disappointment.

[scburbs] 01/7/2019 19:43

NAV is an important concept to understand if you are investing. The deduction of debt is fundamental to it being NAV in any form.

You can see the reconciliation in the accounts of the EPRA NAV of £212.9m to the IFRS NAV of £147.4m (near the start of Chairman’s statement).



Then scroll to the balance sheet and you can see the IFRS NAV of £147.4m is made up of £315m of assets less £71.9m of current liabilities and £95.7m of non-current liabilities. The liabilities include the debt.

Important to understand this if you are thinking of investing as oppose to gambling.

[pavey ark] 01/7/2019 19:07

Not willing to get into this bun fight over NAV or NNNNNNAV.
pl0110 it looks like you are correct I also note that you're not a fan of the company or its management, which is fair enough.

On the matter of the recent planning approvals and asset lift there is little room for doubt....it is significant!!

INL bought the Wilton Park site for c. £35m and I expect that without planning approval the value hasn't moved much.
On getting approval for PART of the site (350 houses) the GDV has been put at £350m.
If you give the plots a value 20% of the final house value you get £70m with another part of the site (250 houses) still to achieve planning.
I expect that the prospects of planning permission for the remainder of the site has increased greatly with the first approval.

The joint venture at Cheshunt had a GDV of £620m so £310m to INL.
By my rough rule of thumb this second site is worth c. £60m to INL but it looks like they only put in £5m and took out a loan on the rest.( that dreadful, nasty debt...Oooh I don't like that!!!))

Cut it, slice it or dice it these are significant figures for a company with a market cap of £130m

[p1966] 01/7/2019 18:32

And a delayed publication 300k sell today, which as you say goes against the current news flow.

[spob] 01/7/2019 18:17

trust me, epra nav accounts for the debt

[pi0110] 01/7/2019 16:38

Suburbs

I think you may be confusing EPRA NAV with EPRA NNNAV.

Take a look at this link



Scroll down to EPRA NAV & EPRA NNNAV

[spob] 01/7/2019 15:12

yes the key word is "NET" LOL

[scburbs] 01/7/2019 14:53

They are disclosing EPRA NAV (net asset value) so by definition it is net of the debt.

GAV (gross asset value) would be before the debt is deducted.

[pi0110] 01/7/2019 14:21

My understanding of EPRA is that it does not include any outstanding debt within the company. Inland Enterprise Value is £233m so not quite the discount to NAV that some have suggested.

Happy to be proved wrong on this one.

[spob] 01/7/2019 12:03

previous article - dated June 10




Inland Homes wins major planning consent


Simon Thompson

June 10, 2019

Inland Homes (AIM:INL:62p), a leading brownfield developer, housebuilder and partnership housing company with a focus on the South and South East of England, has been granted planning permission, subject to the signing of a s106 agreement, on its flagship site, Wilton Park in leafy Beaconsfield, Buckinghamshire. This is a very affluent area of the country that is located within 23 minutes to London Marylebone by rail, and offers quick access to the M40, too.

Furthermore, gaining consent is a significant step forward for the long awaited development of the 100-acre site, described by upmarket estate agency Savills “as the best residential opportunity in southern England.”Planning permission will enable delivery of 350 homes, as well as commercial and community space within a parkland setting, with an estimated gross development value of £350m. A further part of the site is subject to a draft allocation for development, which could provide up to 250 additional homes and 200,000 sq ft of commercial space.

Inland’s management team is currently considering their options for the site, but no matter whether land is sold off as parcels, developed in house or through a joint-venture partnership, the planning consent will lead to a major increase in the carrying value of the site. In the meantime, the site continues to generate annual rental income of £1.5m from residential and commercial occupiers.

To put the magnitude of the potential profits from this site in to perspective, Inland acquired the former Ministry of Defence site five years ago for £35m, including deferred consideration. Once developed, and based on a 25 per cent gross margin and an 80 per cent profit share, I estimate this implies a post-tax profit north of £50m for Inland, adding a thumping 24p per Inland’s shareholders’ equity, or 40 per cent of its current share price. I would stress that these are my forecasts as analysts have yet to update their models.

Moreover, there could be further good news on the planning front later this month, as Inland’s delayed planning decision at Cheshunt Lakeside, Hertfordshire is scheduled to be heard on 25 June 2019. The site is located just outside the M25 and only 27 minutes from London's Liverpool Street station by train. In June 2016, First Property entered into a joint venture whose purpose was to acquire a site in Cheshunt, Hertfordshire, obtain planning permission and ultimately sell the land. Under the terms of the joint-venture agreement, Inland has an obligation to fund 50 per cent of the costs of the site and is entitled to receive 50 per cent of the net returns.

Planning application for 1,853 units was recommended for approval by the planning officers, but the planning committee of Broxbourne District Council resolved to defer the decision, requesting clarification on a few matters (for instance, car park allocation). Inland is hopeful of winning approval at the forthcoming hearing later this month. A positive decision on that site will result in another significant increase in its valuation. Bearing in mind the timing of thee planning decisions, Inland will release a pre-close trading update in early October 2019 in order to be able to offer greater clarification on their financial implications, having sensibly decided to move its next financial year-end from 30 June 2019 to 30 September 2019.

In the circumstances, it’s hardly surprising that Inland’s shares have reacted positively. Even before factoring in any valuation uplifts the company’s market capitalisation of £127m is 40 per cent below Inland’s end 2018 European Public Real Estate Association (EPRA) net asset value (NAV) of £213m (103.6p per share). The potential for the realisation of substantial gains on the company’s land bank as it passes through the planning process, and an attractive share price discount to NAV, were major bull points in the investment thesis I outlined when I included Inland’s shares, at 57.75p, in my 2019 Bargain Shares portfolio. Strong buy.

[spob] 01/7/2019 11:53

Inland Homes’ urban village


Simon Thompson

June 26, 2019

Inland Homes (INL:68p), a leading brownfield developer, housebuilder and partnership housing company with a focus on the south and south-east of England, has been granted planning consent to create a new urban village of 1,725 homes and 19,000 square metres of commercial space at Cheshunt Lakeside, Hertfordshire. The site is located just outside the M25 and is only 27 minutes from London's Liverpool Street station by train.

It’s a significant milestone after Inland entered into a joint-venture partnership to acquire the site in June 2016 with a view to obtaining planning permission and ultimately selling on the land. Under the terms of the joint-venture agreement, Inland has an obligation to fund 50 per cent of the costs of the site and is entitled to receive 50 per cent of the net returns. Together with its joint-venture partner, Inland owns and controls 1,253 of the 1,725 consented residential plots and 4,905 square metres of commercial and educational space within the Cheshunt masterplan area, which has an estimated gross development value of £620m. Inland is the lead developer on the broader masterplan, and is working with the council to deliver it.

The planning approval highlights Inland’s strategy of acquiring quality land in areas of high demand, adding significant value by securing planning permission, and then generating value for shareholders through a mix of selective in-house development and by providing a turnkey solution for development partners. Analysts at house broker Panmure Gordon expects the site to be cleared in late summer/early autumn and first delivery of the housing scheduled for mid to late 2021.

Taken together with the planning consent gained on Inland’s flagship site at Wilton Park, Beaconsfield, which I covered a fortnight ago ('Inland wins major planning consent', 10 Jun 2019), we can now expect Inland’s end 2018 European Public Real Estate Association (EPRA) net asset value (NAV) of £213m (103.6p a share) to increase sharply when it releases a pre-close trading update in early October 2019, having sensibly moved its next financial year-end from 30 June 2019 to 30 September 2019 to be able to offer greater financial clarity on the Cheshunt Lakes and Wilton Park developments.

Analysts are holding fire on upgrading their financial estimates, but it’s clear to me that these two flagship developments have the potential to create additional value in the order of 40 to 50 per cent of Inland’s last reported NAV, albeit the company is likely to be more conservative in its valuation approach in the 2019 accounts. The point is that with the shares trading on a 34 per cent discount to NAV per share prior to analysts releasing significant upgrades, the potential for a material increase in the carrying value of Inland’s two flagship developments is simply not being priced in, nor is their near-term profit potential if Inland decides to sell on parcels of land to major housebuilders. There is undoubtedly demand given the proximity of both schemes to London.

The likely realisation of substantial gains on the company’s land bank as it passes through the planning process, and an attractive share price discount to NAV, were the key bull points in the investment thesis I outlined when I included Inland’s shares, at 57.75p, in my 2019 Bargain Shares Portfolio. The company is clearly delivering. Trading on a bid-offer spread of 67.5p to 68p, valuing Inland’s equity at £140m, I continue to rate the shares a strong buy and introduce a target price of 95p to 100p. Strong buy

[philjeans] 01/7/2019 10:30

Shares are still 25% below the price in 2016!!

With the best possible news and clearly very much higher earnings now for years to come!