Telford Homes Share Discussion Threads

[hybrasil] 10/10/2018 12:44

why should a housebuilder be worth more than its net assets - in this market- Sell

[speedsgh] 10/10/2018 10:47

Also agree with owenski et al. TEF Are a quality business that will prosper in the long term but there is no disguising that they are swimming against the tide at present. Up to each to decide whether to stay strapped in for the whole journey or to sit on the sides until the immediate outlook improves. Discl: I don't currently hold but would like to in the future.

[salchow] 10/10/2018 10:38

I agree with both owenski and warranty. A quite negative update that I read as possibly signalling issues going forward. It is clear that overseas interest in UK property has stalled. Current p/e not relevant if property market hits more problems.

[warranty] 10/10/2018 09:06

I agree ownski, sounds like a veiled profit warning to me with both housing struggling and rents falling. Certainly if they don't hit that £50M profit figure the market will hammer them. One to keep an eye on but certainly not one to buy just yet.

[owenski] 10/10/2018 08:59

Trying to sound upbeat on a concerning trading outlook. Avoid imo

[jurgenklopp] 10/10/2018 08:56

Not sure of the scope for consolidation in the housebuilding sector but this must be an attractive bolt-on for some of the larger players.

[5chipper] 10/10/2018 08:48

With a profit of £50m then they are on a p/e of 5

[trbcjb] 10/10/2018 08:38

Seems a good point to top up 352p.

[5chipper] 10/10/2018 08:23

Rather downbeat wording to what was a nice positive update!

Do wonder how scripted such updates can be!

[jurgenklopp] 10/10/2018 08:14

Rather a violent overreaction to the trading update !!

[jurgenklopp] 05/10/2018 11:20

Trading update next Wednesday.

[sharesoc] 05/9/2018 15:44

There is a recent report on Telford Homes' AGM which can be found here:

[5chipper] 02/9/2018 13:44

Reports in the press this weekend that the government is under pressure to extend help to buy scheme. Good news even if tef do not directly benefit as much as traditional housebuilders

[hillofwad] 10/8/2018 16:00

Zoopla -41% increase in flat prices in Limeharbour in the last 5 years

[hillofwad] 10/8/2018 15:54

Well It's all relative . TEF paid £13m for the Liberty site in 2013 It was a very bold purchase for a small company at the time as it was bought completely unconditional in LBTH.Always a dangerous place to tread .Not only that they even delayed the start having the cojones once planning consent was obtained (no mean feat) to go back in for a couple of extra floors

The site would have been acquired with target margins based on house prices which were probably 40% lower than they are today on the Dogs -so plenty to play with and 66% secured already

[dr_smith] 10/8/2018 15:43

For clarity, I "temporarily" sold during the high in May, to take up another opportunity.
TEF remain on my watch list, I mainly focus on medium/long term and I favour the property sector and with TEF bias to rental market that is in itself expanding, makes it different to peers, though London market is often a special case, as seen by BKG (but in o/o context).

I don't see any reason why agm comments are any different today. Note the price band differentials:



12/7/18 agm statement:
"I am pleased to report that since our final results on 30 May 2018, Telford Homes has continued to perform well. The London housing market at our typical price point has remained robust, with ongoing demand from a broad base of customers. The average price of the open market homes within our development pipeline is £539,000 and we expect that to remain relatively constant in the future. Our homes priced below £600,000 continue to sell at a steady rate. Above that level we have to work harder with prospective customers, but nevertheless we are still securing sales in line with our forecasts.

Forward selling continues to be a core part of our business model through early open market sales launches and forward funded build to rent developments. This approach reduces risk whilst increasing visibility over profit recognition and cash inflows. Combined with our average price point, this will help to insulate Telford Homes against any short to medium term volatility in the London housing market."

[shaker44] 10/8/2018 13:58

you guys seem.more sanguine than I feel.about only 1 sale??
what am I.misding?

[dr_smith] 10/8/2018 13:25

OK understand. :-)
Yes, surprising.

[hillofwad] 10/8/2018 13:03

LIBERTY

No 2 years ago when they started on site was the initial launch pre-Brexit and the 2016 tax changes for landlords so perfect timing .They got them away home and abroad over the space of a few weeks Since April 2106 there were no further launches til June 2016

In other words over 2 years+since the initial launch they would have received enquiries about the development and unreleased apartments .Only 1 extra sale appearing .It just shows how things have deteriorated .

[dr_smith] 10/8/2018 12:43

Sorry - crossed wires I think:
"The fundamental change clearly evident at the Liberty Building launched over 2 years ago pre-Brexit where 66% were cleared off the boards at the initial launch

Since the recent launch having absorbed 2 years of pent up demand to tap into has produced 1 solitary sale"

So 2 years ago was a re-launch?
I fear I have missed the point somewhere, not aware of back-story on the development.

Greystar:
Thank-you for example, so if you are an institutional/corporeate BTR, you could say stamp duty is 2% of market value of finished property - a cost to be factored in in calculating ROI from rent.

As stamp duty is as you say typically on land cost not construction costs, I was expecting it would equate to quite a bit less than 2%, which is ball park for a self-build you or I could do.

[hillofwad] 10/8/2018 11:50

No not the case with Liberty The clue is in the banner 66% sold TEF tend to release in bunches (Manhattan ,Bermondsey and City North ) and not show total availability when there is a shedful to get shot Same rules apply with Bow Garden Square

STAMP DUTY IS PAYABLE ALL SALES AND LAND PURCHASES BUT NOT ON CONSTRUCTION COSTS

The 9 Elms deal between TEF and Greystar scheme for example is a classic case of a stamp duty saving exercise

Greystar will be paying a whopping £12 m stamp duty on their land purchase of £101m
TEF and Greystar are building 894 apartments and rather than buy the completed project for say fair market value at say £600m from TEF which would flag up £71m in stamp duty -they are entering into a construction contract plus profit which attracts no stamp duty !-massive saving

[dr_smith] 10/8/2018 11:08

hillofwad:
Thank-you for links.
At a glance the liberty page is a summary page updated to have one sold, I would assume all others sold. If they were still being built, an astute advertiser would be showing them as say "available from ?/?/? date for occupation, available now to buy from plan".

BTR. For new builds, (as in self-built private folks) I understand you pay stamp duty based on the land cost.
I don't know how this works for the corporate builds, whether stamp duty carries a high unit cost, as you have say 20 homes/floors on each ground plot, so maybe in that example you only pay 1/20 of the ground cost stamp duty per home.. though no doubt there are different stamp duty rules in this scenario, so don't know if any increase would be adverse or material for TEF.
V11SLR in earlier post offered this link to answer that:

..so whether gov want to change corporate rules will be a slightly different decision as it would be counter-productive to objective of increased supply.

Dave
p.s. Middle name Russell..not a Dr..couldn't see my name in link but great song - and relevance is not a changin'. ;-)

[hillofwad] 10/8/2018 10:05

Nocton

I have been watching TEF like a hawk since 2011!!Investigating their individual developments and following sales Any question please ask and will try my best from the research I've undertaken to provide some sort of an answer .
They enter a challenging time but we are lucky to have a first class set of BODS and senior managers , a loyal band of sub-contractors .

They have forged partnerships with the creme de la creme.The fact Savills are seeking them an institutional partner speaks volumes. Expect the best!

[nocton] 10/8/2018 09:22

Thanks, for the background, hillofwad. I've only been a shareholder since 2016 so I was not aware of the earlier sort of sales.