Telford Homes Share Discussion Threads

[dr_smith] 28/9/2017 09:01

I agree BTR is a good sector, but cutting margin at a time when workforce and materials are constrained and sales of new properties are good, dropping net margin sounds like a poor move. If that was offset by much higher sales than would otherwise possible, then fair enough, but on its own, it doesn't stack up in my eyes.
They are builders in the business of building and selling houses.
Their statement is that they do not like the risk of selling. Well that is the business they are in.. that is the role of the company. Passing margin to others when resources are at a premium makes little sense to me in the current market.
Yes.. FWIW I am a holder.

[shaker44] 28/9/2017 08:17

With affordability such an issue for buyers, Btr is a great move. Many pension funds etc value the forward income because of its stability and %,and see btr as an attractive part of their portfolios.

[speedsgh] 28/9/2017 07:35

Telford Homes boss swaps cashflow for lower margins in BTR push -

Telford Homes chief executive Jon Di-Stefano has revealed details of the financial trade-off behind the AIM-listed London developer’s plan to deliver 50% of its £1.5bn pipeline as build-to-rent (BTR).

“Our net margin on traditional sales is 16%,” Di-Stefano told an audience gathered this week at M&G’s first completed BTR site in Acton.

“The cashflow improvement from having BTR sites forward-funded by the eventual owner and the lack of sales risk means we are happy to accept a 12% net margin,” said Di-Stefano, who promised in March to increase Telford’s BTR output to 50%.

The east London-based firm has grown rapidly since 2013. Revenues have risen from £142m to £292m and profits have increased from £9m to £34m. Investors were told in May that Telford was “on track” to exceed £40m in profits for the year to March 2018 and £50m the following year.

“Our ambition is to become a key BTR provider,” said Di-Stefano, who took over as chief executive of the business in 2011, after nine years as finance director.
37% leap in BTR activity

M&G is funding two Telford schemes: 150 units in Bow and 125 in Upton Park.

Alex Greaves, head of residential investments at M&G Real Estate, told the audience its income yield target of 3% to 4% was being achieved on the 173-unit Rehearsal Rooms development close to North Acton station.

M&G is one of a growing number of investors fuelling the growth of the BTR sector. BTR development activity has leapt 37% to 96,000 since March, according to figures released this week by the British Property Federation and Savills.

More than 17,000 BTR units are complete, 24,000 are under construction and 55,000 are in planning.

[james188] 17/9/2017 20:35

Yes. The student uni market is even more saturated that the PRS market (I note that Greystar and Goldman/Wellcome now also fish in that pool) and I think that the prime time to get involved was over 10 years ago when the likes of UPP were cleaning up. Managing accommodation has always been a poorly valued activity where I dislike the risk/return ratio. Good luck to WJG with that line of business. I am very happy that TEF has steered well clear.

[hillofwad] 17/9/2017 20:11

James I think the student accom investment market is going to run out of steam Its gone past the stage where a deal is undertaken with bluechip uni on a 25 year mangement lease which the funds will buy day in day out at 4.5/6% Today there are more watered down versions with mangement companies admiitedly on the hook in the case of Watkin Jones suupported by WJ covenant but there will come a time when revenue dips putting the management rent under water Not just yet but sometime as it gets over saturated How many more blocks can Cardiff accomodate for example ?

[james188] 16/9/2017 14:25

Agree with the above. What seems bizarre to me is how well the Watkins Jones share price has fared in comparison; the market seems to view the business much more favourably and I struggle to understand why. In any event, I could not resist topping up at this level.

[hillofwad] 16/9/2017 08:56

OOHROG

Nothing specific Tube bomb Recent agents survey not great Falling tide lowering all boats as Morgan & Pidgley seemingly calling the top with personal share sales
Still some unsold units at Bermondsey but these are 3 bedders and these have been difficult to shift from Day 1 .if they ahd been all1and 2 they would have been sanpped up

Even if big haircut applied still well above original targets You cant be too greedy

Apsrt from their derisk move into the BTR wecan thank the BODS for cleverly attained a position where they have no major developments completing during 2018 unsold

That really is avery special place to be in what looks to be a challenging market amrjket

[oohrogerpalmer] 15/9/2017 11:49

Some bad news out!!!!

[aimingupward2] 02/9/2017 12:31

Short piece in I.C. yesterday commenting favourably on Telford - not affected by reduction in the help-to-buy money as it is not involved and is advantageously in the build-to-rent sector.

[jurgenklopp] 07/8/2017 11:13

Director purchase of 1500 shares today at 390p.

Every little helps !!!

[hillofwad] 24/7/2017 13:04

Puku

Uncertain times ahead and TEF will be working hard to drive sales through on the residual elements at Bermodsey, Canary Wharf and Brookmans Park

You can feel a little more confident that the BODS made strategic defensive moves last year from individual sales to sell product to the BTR sector

The groundbreaking deal with Greystar is effectively 2 years of completed units keeping the wheels spinning a few years ahead

The 3 sites acquired earlier this next year wont finish until 2019+ and the current jitters is likely to stop the flow of new entrants into TEF,s patch

[puku] 24/7/2017 12:36

Continuing to hold but nervous. Two friends in Wimbledon are trying to sell their flats, and can only get 10% below what was reasonable market value in the £500,000 range.. Meanwhile estate agents in the area downsizing their offices. EU professionals nervous and a stream of S Africans are said to be going home.
Doesn't bode well for the housing market.

[hillofwad] 19/7/2017 10:49

Yes all good news reemphasising their success in crossover of private /public sector.Very few Londo developers have managed that as sucessfully as TEF in this area
Schools ,churches ,mosques, community centres ,strudios, you name it TEF are there
In a post Grenfell world TEF are likely to feature at top of the list as ideal partners

[owenski] 19/7/2017 09:49

Nice post Jurgen

"David Birkbeck, Chief Executive of Design for Homes (the main promoter of the awards) said: “The judges were impressed by how Telford Homes delivers high quality homes from complex developments and mutually beneficial partnerships".

[jurgenklopp] 19/7/2017 09:28

This is from last week:



;o)

[jurgenklopp] 19/7/2017 09:05

The housebuilders are doing quite well this week (I think Liberium have done a raft of updates this morning to push up some companies).

TEF ought to eventually play catch up as it has been very quiet for a week or two.

[hillofwad] 14/7/2017 08:29

Ceritto Did they mention anything yesterday about the commercial elements at City North,Poplar and Stone Studios?

[shaker44] 14/7/2017 02:59

Good stuff Cerrito, many thanks

[jurgenklopp] 13/7/2017 23:54

Cerrito.

AGM report much appreciated.

Thank you.

[tudes100] 13/7/2017 23:47

Thanks for the update Cerrito, much appreciated.

[gp1948] 13/7/2017 23:12

Cerrito - many thanks for posting your report on the AGM. A few things to think about, but nothing too worrying and future plans for growth restated and unchanged.

I think TEF are a class act, but possibly too small a company yet for institutions to consider - their Mkt Cap is still less than £300m, surprising perhaps for their level of turnover and profit.

"Not a great deal of hard news" you said, but I believe that's because TEF keeps shareholders promptly updated on new deals and it's only been about 6 weeks since the final results for Y/E 31.03.2017 were announced with news updates and outlook for the future.

Cheers,

gp

[cerrito] 13/7/2017 22:38

I was at the AGM which had a good turnout.
I had a good feeling; all the Directors both in the formal AGM and in the lunch afterwards seemed comfortable in their own skin and came across as quality and nice people. Plenty of chance to interact with Directors. Other shareholders that I spoke to were comfortable with their holding.
Not a great deal of hard news.
A lot of discussion on their shareholder base:they only have two institutions with more than 3%-Schroders and Liontrust with 8% between them whereas 19% of the shares are held by Hargreaves L, TD and Barclays. A consequence of this was that voter turn out was just 20%.
We were assured that they are in regular contact with the City and indeed had done a tour of some of their developments with Institutional Investor early in the week. Their October 2015 placing of 14m shares when they went up from 61m to 75m shares was placed with institutions. I have just checked the FT site and see that Slater, Investec, Aberdeen, Thames River and KBL have 11% between them. One reason for lack of institutional buying may be the large bid/off spread and that did not come up.
Said that no plans to leave AIM and noted that Inheritance Tax Funds an important shareholder base.
A good deal of discussion on EU workers which make up 60% of the London construction labour market. They said they could take this in their stride and emphasized the lobbying that the Building Industry/Build First are doing with the Government-personally I think that economic pick up in Eastern Europe and the exchange rate will be more important than whatever the Government says.
For me good that the CEO volunteered that they were looking closely at making sure they were not over extended operationally.
Asked about modular building and they said that does not lend itself to the high rises they are building.
Asked about their fixed price contracts-for example with the Greystar deal and they were confident that had everything under control-given question marks on EU labour I fret a bit on this.
For me a lot of ground had already been covered in their excellent webinars

[phillis] 13/7/2017 09:52

no mention of "significant second half weighting" with Finals only six weeks ago

Running behind a bit?

[jurgenklopp] 13/7/2017 09:40

to be fair to the Company they have been stating for a while now that they are on track to exceed £40 million pre-tax this year and £50 million for y/e March 2019.

So the market has a good idea of what to expect even if it is heavily weighted to the second half of this financial year.

What may give momentum to the share price is confirmation of some of these 'exciting opportunities' coming to fruition. In this respect Telford has developed a very good reputation and ought to deliver.

A reasonably hefty divi will hit the account tomorrow - I will have a gentle top up !!