Inland Homes Share Discussion Threads

[hatfullofsky] 16/2/2023 08:15

Nice read from Gleeson - Net reservations starting to recover, demand for consented land remains strong

[brownie69] 14/2/2023 20:34

I agree wighammer. Seeing First Equity appear is a bad sign.

BTW I'm a recent new holder here too. It looks to me as if all the bad news is priced in. Plus markets have been ticking up and interest rates are not going to get as high as was forecast. I'm here with a minimum 2 year view.

[wigwammer] 09/2/2023 13:14

My understanding is that First Equity offer loans against the value of shareholdings, ie the shares are used as collateral. So as the value of the shares fall, they take a higher quantity to cover the same value. I don't think they have any active interest in the shares themselves. My own experience is they appear as holders during a period of price weakness, such as we have seen here. Eventually the weakness stops (but who knows exactly where and when!)

[cerrito] 09/2/2023 13:04

I have never heard of First Equity but see they have been around for 30 years. I googled them to see if they had been involved in any corporate activity with listed companies but could not see any references.
No surprise to me that people are coming in bottom fishing.
I read the Bellway TU this morning and no surprise that they have taken their foot off the gas on terms of land purchases.

[geckotheglorious] 09/2/2023 12:51

Interesting new stockholder with a 3.24% odd stake.

[oi_oi_savaloy] 09/2/2023 11:49

Wigwammer - if I knew that (point of maximum fear/ebb) I'd be a billionaire! From my point of view there are so many variables on a given opportunity with price and vendor motivation being the top two. If there's a stressed sale I've a very good chance at acquiring the site at a discount to the open market value (INL's situation).

From a plot value I'd be way higher than £15,250 a plot. You're paying more for a plot than that in Wales for affordable/council housing plots!

BUT.....It's not that easy - say they try and sell Hounslow barracks - there aren't many people that a) want hounslow b) want 600 units in hounslow (or however many they've got) c) want any part of having to build out a part new build/part refurbishment d) £60mill lying around (£20mill for the land £40 mill for the build for arguments sake) and e) INL can't cut it up and sell elements of it off easily.

Which means it all takes time..........and I've not even factored in the affordability/mortgage rate factor or the lack of help to buy (which dictates sales values/sales rates for the incoming purchaser.

I'm hoping INL are piking the low-hanging fruit to sell at the moment whilst also doing everything they can to preserve their working capital (and dropping any build contracts they can squeeze out of pronto).

[cc2014] 09/2/2023 11:42

Difficult questions to answer because your point is that there is a share price somewhere where the opportunity outweighs the risk.

What I can see is that directors are not buying either the ords or the debt. And I can also see covenants have been breached (which were previously waived but one wonders whether the waiver was conditional and is now not applicable since the appalling set of year end results). And if I were the bank I'd want to be scaling back the amount owed to them by any appropriate.

I can also the directors seem naieve when it comes to their balance sheet. Only a few months they were buying back shares at a time when they must of known things weren't going so well.

I can also see the recent RNS related to the zeros is based on a set of unaudited accounts of a JV company which haven't been filed at Companies House and this seems at least to my mind a little naughty too.


My real issue is that in circumstances when the banks want their money back and covenants are breached significantly which is where we are now, companies get forced to sell stuff at poor prices to satisfy the bank (or run a rights issue). They lose control of their own destiny. It also becomes a difficult place to work and the best expertise leaves. Decisons are made on the basis of cash, the bank account and the bank debt not on profitability.

Given the recent mortgage application number which IIRC is the lowest in 20 years or some such similar statistic it's not a good place to be.

My sense is that in the end there will be little value here, either because of a rights issue share dilution or the terms of the refi on the debt will be so onerous as to chew up what remains of the balance sheet.

But, who knows. If they manage to sell a bunch of plots in the next month for a decent price the state of the balance sheet would look very different than my pessimistic outlook.

[mallorca 9] 09/2/2023 11:40

Looks to be going bust.

[wigwammer] 09/2/2023 11:05

They were genuine questions.. any thoughts?

[wigwammer] 09/2/2023 08:46

Identifying that times are tough is the easy bit. We can all guess that. But the difficult point is - when is it priced in? .... If it isn't priced in at £15250, then when is it? ... the ultimate winners in these situations are those who identify the point of maximum fear and invest anyway, are we there yet and if not when?

[oi_oi_savaloy] 09/2/2023 08:32

It's time it takes to sell sites, cost of selling (agents fees), competition of alternative sites, whether the planning consent is actually implementable, whether INL have all the due diligence on a given piece of land (sufficient for others to buy, not the DD that they might or might not have done when they originally contracted on the site).

It's not like you ring a couple of mates and say - I want £5mill for this site, are you buying and they say yes and next week the site exchanges.......the sheer inertia in selling sites..........and buying sites........is truly painful.......

And selling sites unconditionally (where there's no planning consent attached to the land) is not a place you want to be in right now - uncon money has left the building for the moment...........there are still one or two people out there buying uncon (there always is)........but they want a proper discount to the open market value and you know what? They are driving a very hard bargain presently.

This aint a great market for sellers right now, if they are trying to dictate the terms.

[cc2014] 09/2/2023 08:29

The issue for me is cash and liquidity and how much money is being lost on the developments.

The provisions that have been made for future costs due to cost over-runs mean that actual cash will be spent in order to sell stuff at a loss. But where does the actual cash come from because I doubt the bank will let them run the loan up higher, so they are short on working capital..

[wigwammer] 09/2/2023 08:23

Plot value is conservatively a third of the value of a house..... 8000 plots for £15250 each..... all based in the affluent south..... sounds like a good deal, no?

[wigwammer] 09/2/2023 08:20

8000 plots for debt £100m plus equity £22m = £122m, or £15250 per plot...... does that sound overvalued to anyone?

[farnesbarnes] 09/2/2023 08:14

Those assets have been valued at peak of market. And if there is one demographic who are full of their own self importance, who wouldn't recognise value if it slapped them in the face with a free line caught Scottish salmon, its a land buyer.

[wigwammer] 08/2/2023 15:18

"The only solution for INL is to sell some assets like yesterday and sell them for something close to book value..." a buyer of the equity is currently paying 25% of book value... I would think they can sell assets at something better than a 75% discount!

[cc2014] 08/2/2023 15:10

Didn't the breaches occur before the year end figures arrived? And since then they've owned up to a loss for the year of £90m, an incredible movement from Q3.

I'm not sure what rate they think they can refinance the loans at? If you use the zero's as a proxy the market wants around 40% interest on the debt. I suggest the debt cannot be refinanced at any sensible number INL can afford to pay and turn a profit.

The only solution for INL is to sell some assets like yesterday and sell them for something close to book value. Selling anything in this climate at book value is likely to be unlikely given the market knows INL is a distressed seller.

All imho of course. There may be other solutions but regardless I think INL need to get a wiggle on

[wigwammer] 08/2/2023 14:41

"These represent the only breaches of financial covenants on any of the Group's borrowings and Inland Homes have already had discussions with the lenders concerned to procure waivers for both the existing and any forecast expected future covenant breaches for the two lenders concerned. Whilst the Board believes that these waivers will be forthcoming, they consider that if required, these borrowings can be refinanced."

[geckotheglorious] 08/2/2023 13:59

Ask yourself why the seller is continuing to dump. Assuming it is one seller.

If history should have taught people one thing...

As soon as they mention "breach of covenants a possibility" it's time to run for the hills.


See the last RNS.

The Group had already secured a waiver from one of its lenders in respect of its revolving credit facility on the interest cover ratio covenant for the three quarters ending 30 June 2023. 

With the revised provisioning, the anticipated losses for the financial year and net assets at approximately £90.0m, the Group is a going concern, but it does mean that the Group will have breached the net assets and gearing covenants with one lender and the net asset and quick asset ratio covenants for another lender where the Group's combined borrowings are currently £49.3m. 

So, waiver from one lender (great news) but there are question marks over the other two main lenders as per above.

[cc2014] 08/2/2023 12:58

I imagine the institutions are rushing for the exit and can't find enough PI's to offload their shares onto.

It doesn't look good to me. I guess the next stop is 5p.

[farnesbarnes] 08/2/2023 11:40

Any buyers out there? Asking for a market maker friend.

[andy246] 01/2/2023 12:13

Inland ZDPs annual report has been published.
The company announced it may buy back ZDPs ahead of maturity at a discount to the redemption value.
Hopefully they get started soon and start buying back their debt at a 35% discount to the notional value.