Telford Homes Share Discussion Threads

[cfro] 21/9/2015 14:40

Absolutely no financial details whatsoever, so nobody can tell if this is a good deal or not.

It seems a little strange to me that they wouldnt want to concentrate on the £1bn of developments they already have under their belt, as apposed to buying more..

Add in the fact that all the signs are there for a top in London property prices. Overseas buyers have nearly all dried up and BTL investors are about to be penalised with new tax rules. Where are they going to find the buyers from?

[speedsgh] 21/9/2015 13:29

Summary of timescales announced in today's acquisition...

City North: construction expected to commence in 2016; completion expected in 2020; expected to add £100m+ to development pipeline.

Balfron Tower: refurbishment expected to commence in early 2016; completion expected by 2018; expected to add £15m revenue to development pipeline.

Gallions Quarter: subject to final completion, Phase 1 expected to commence in 2016; completion expected by 2020; expected to add £75m+ revenue to development pipeline. (Phase 2 expected to commence upon completion of Phase 1)

Chrisp Street: development expected to commence in 2017 with phased completions over 7yrs; potential to add £300m+ revenue to longer term development pipeline.

[1gw] 21/9/2015 13:14

I've bought back in. I think the fall has gone far enough and today's news looks like a great addition to the pipeline.

I'm not sure it will fill in the short-term hole because I think that's in FY17 isn't it? i.e. They're expecting profit to move up nicely this year, then fall back in the year ending March 2017 before jumping again the following year. It looks to me like there are unlikely to be many completions on the properties acquired today by March 2017. But for the longer-term it looks very good and I hope the market will start looking beyond the FY17 dip to see the potential in FY18+.

I particularly like the statement attributed to the chief exec: "we are targeting significant growth over the next ten years".

All remains a bit at the mercy of developments on the housing front in general and the buy-to-let front in particular, but that's why the price is where it is I think.

My opinions only. Please do your own research.

[shanklin] 21/9/2015 08:08

I presume this is intended to fill the short-term hole in TEF's development pipeline?

[pj 1] 21/9/2015 07:57

RNS Number : 5903Z

Telford Homes PLC

21 September 2015


Press Release 21 September 2015

Telford Homes Plc

("Telford Homes" or the "Group")

Acquisition of the regeneration business of United House Developments for GBP23 million

Telford Homes Plc (AIM:TEF), the London focused residential property developer is delighted to announce that it has acquired the regeneration business of United House Developments ("UHD") on a debt free basis from United House Group Holdings Limited ("UHGH"). The consideration for the acquisition was GBP22.97 million and this has been entirely funded from the Group's existing cash resources.

The regeneration business of UHD consists of a group of companies that have various interests in four significant development opportunities in North and East London. These development opportunities are City North adjacent to Finsbury Park station, the refurbishment of the Balfron Tower in Poplar, two phases of development at Gallions Quarter near Royal Albert Dock and the regeneration of Chrisp Street Market in Poplar. One employee is transferring from UHGH to Telford Homes with no other central costs, assets or liabilities being acquired. The developments are all at various stages in the planning process but they have the combined potential to add some GBP500 million to the Group's existing GBP1 billion development pipeline.

City North is a mixed use development comprising 355 apartments and 109,000 square feet of retail, leisure and office space in a joint venture with the Business Design Centre in Islington. The scheme includes two 23 storey towers linked by a 12 storey terrace building. The site has full planning permission and incorporates plans to improve the facilities at the adjacent Finsbury Park station. Telford Homes will immediately work with the Business Design Centre to ensure that construction can commence in 2016 with completion expected in 2020. The gross development value of City North is in excess of GBP200 million and the joint venture is therefore expected to add over GBP100 million to the Group's development pipeline.

Balfron Tower is an iconic 26 storey grade II listed building in Poplar. The project involves the refurbishment of 146 existing homes in a joint venture with Londonewcastle and the owners, Poplar HARCA. The development is subject to receipt of planning permission, and the joint venture has been working with architects Studio Egret West and interior designers Abe Rogers to produce a proposal sympathetic to the heritage of the tower. Allowing for this process, the refurbishment should commence early in 2016 and be completed by 2018. Telford Homes owns a 25 per cent interest in the scheme which is expected to add over GBP15 million of revenue to the development pipeline.

Gallions Quarter is a multi-phase development adjacent to Gallions Reach DLR station near Royal Albert Dock. The development is controlled by Notting Hill Housing Group ("NHHG") and Telford Homes is acquiring a 50 per cent interest in two of the phases to be developed in partnership with NHHG. NHHG and Telford Homes have already established a strong partnership on many other developments. The first of these phases has a detailed planning consent for 292 new homes subject to signing a section 106 agreement and the other phase has outline consent for a further 254 homes. The area around the Royal Docks is experiencing significant regeneration and substantial commercial investment and will benefit from the new Crossrail station at Custom House, due to open in 2018.

The process through which UHGH is acquiring a legal interest in Gallions Quarter has not yet been completed. The final steps are expected to be concluded shortly and accordingly a proportion of the total acquisition consideration has been deferred and becomes payable on securing the legal interest in the development. Should this condition not be satisfied then the Group will issue a further announcement adjusting the total consideration accordingly and confirming that it is not proceeding with the purchase of the relevant interest in the Gallions Quarter development. Assuming the condition is satisfied the two phases will add over GBP75 million to the Group's development pipeline. The first phase is expected to commence in 2016 and be completed by 2020 with the remaining phase commencing at that point.

The regeneration of Chrisp Street market is a major development opportunity in partnership with Poplar HARCA. Telford Homes has a longstanding relationship with Poplar HARCA and will now work together with them to further their vision of transforming the area around the existing market square into a new commercial and leisure destination. The development is expected to include several hundred new homes in a location that has recently been announced as one of the Greater London Authority's new Housing Zones. The proposals require substantial consultation with local residents, commercial occupiers, the London Borough of Tower Hamlets and other interested parties. The ultimate acquisition of the development from Poplar HARCA is subject to achieving all necessary consents. The aim is to commence development in 2017 with phased completions anticipated over a seven year construction programme. Poplar HARCA are expected to retain a small interest in the development which has the potential to add over GBP300 million to the Group's longer term development pipeline.

This acquisition is an excellent fit with the existing business of Telford Homes. All of the developments are in the Group's core area and therefore represent an exciting opportunity to substantially increase the Group's development pipeline in one transaction. For a limited initial investment Telford Homes now has an enhanced longer term strategic pipeline stretching over the next eight years. The Board of Telford Homes looks forward to working with both new and established partners to develop these significant opportunities.

Jon Di-Stefano, Chief Executive of Telford Homes, commented: "Telford Homes is one of the most respected developers in London and we are targeting significant growth over the next ten years. The acquisition of the regeneration business of United House Developments represents an excellent opportunity to make a substantial addition to our development pipeline including longer term strategic opportunities. The four exciting developments being acquired are in locations where housing demand remains strong and we look forward to working with the various partners already involved in the schemes. I would like to thank Rick de Blaby and everyone at United House for their assistance during the last two months and I wish them all the best in the future."

Rick de Blaby, Chief Executive of United House Developments commented: "This transaction completes a wholesale restructuring of the United House Group which started last summer, when we demerged our construction business. United House Group is now in a debt free position and liberated to develop out the balance of our portfolio, whose end value exceeds GBP150m, and return to our core expertise of delivering bespoke, niche London residential developments upon which we have earned a widely respected reputation. The regeneration schemes which we have nurtured and the relationships we have with our joint venture partners are hugely important and valuable to us, and given the scale of the investment they need going forward, I am confident that in Telford Homes and Jon's team we have passed them into the best possible hands."

- Ends -

[gswredland] 24/8/2015 10:29

Yep,this has fallen a long way. Slater still in here I wonder?

[qs99] 22/8/2015 00:21

Wow that was not on the cards Imo...sub£4.. But UK property market esp. London is still v strong Imo....perhaps a buying opp

[joe_satriani2] 21/8/2015 16:47

Wasn't expecting to see TEF sub 400 - outfall from a general market downtown?

[gp1948] 10/8/2015 08:46

Juggler - yes, that sounds very likely, thanks.

[the juggler] 10/8/2015 08:17

Gp1948 I summise that Slater was telling his followers who bought on the back of his recommendation a few months ago to keep the faith as he can see no reason at the moment to sell.

[caradog] 10/8/2015 07:24

Shame about the photo of the vet, seemingly examining a horse's eye with an instrument designed to examine the human ear.

[gp1948] 09/8/2015 12:43

It's an interesting article - I'm puzzled why he recommends the shares as a "Strong hold" rather than a "Buy". Is a "Strong hold" better than a "Weak buy"?

[the juggler] 09/8/2015 12:08

Another article in the Telegraph where TEF gets a further recommendation from Jim Slater today.

[robbo35] 06/8/2015 22:34

Added here too, looks like there's some catching up to do, seems to be lagging the other housebuilders.

[melody9999] 06/8/2015 22:24

IMV China, interest rates, money laundering can all be quoted as reasons to sell. But I suspect that demand for TEF houses will not be greatly affected by any of these. I can't see our BOD being in any way concerned - whilst I maintain that view these are an easy hold for me at this point.

[gp1948] 06/8/2015 14:43

Let's hope the minds qualify for greatness and not delusion!

[cestnous] 06/8/2015 14:33

Great minds etc....... :¬)

[gp1948] 06/8/2015 14:31

By coincidence cestnous, I did the same, although I think it might be a little while before TEF catches up with its previous highs, but the potential is there.

[cestnous] 06/8/2015 14:10

Well I've stopped watching and bought in this morning and now in profit :¬)

[shanklin] 29/7/2015 10:54

If I had responsibility for eliminating money laundering in the UK, I would believe this was far from negligible.

However I doubt TEF is in any significant manner involved in the types of property involved. Also in comparison to 8.3m people living in London and 3.3m households, as per I imagine this alleged 36k is having a negligible effect on the market into which TEF is selling.

[cfro] 29/7/2015 10:40

I dont believe that 'only' 36k is negligible Shanklin personally speaking.

[shanklin] 29/7/2015 10:32

According to The Times yesterday, "Transparency International estimates that there are 36,000 London properties owned by hidden companies."

So, negligible in terms of the London property market.

[caradog] 29/7/2015 10:07

Telford describe their homes as "relatively affordable" and the PM is referring to expensive properties used by the very rich to circumvent taxation through property investment via companies.
I agree with Dr Smith. Whilst there is a fundamental shortage of homes, builders in Telford's segment will continue to do well. I don't think the long-term story will change anytime soon. Selling now, for me, would lead to CGT and the task of finding a similarly solid IHT-exempt stock. There simply aren't that many around of this quality.

[shanklin] 29/7/2015 10:04

In terms of forward sales, so long as they manage to re-sell a particular unit, is a customer dropping out a significant boost to profitability, i.e. does TEF get to keep an up-front deposit or fee of some sort?

[dr_smith] 29/7/2015 10:00

cfro. All fair comment.
Personally:
1) Whilst there is a shortage of homes, I am not too concerned - I see it not as a negative but as less icing on the cake, but still in a market where demand outstrips supply.

2) From a builders perspective, any change in market - such as less demand for premium homes and more demand for typical 3 beds etc, can be accommodated by changing the mix of properties built to match changing demand.

To back up my view I can quote from TW. half year results today:
"In the short to medium term, and with the support of low unemployment and wage growth, we anticipate that modest interest rate increases, such as those anticipated by the market, are unlikely to significantly disrupt the housing market environment."

OK interest rates aren't same as money laundering, but have similar effect on demand, so not too concerned for medium term, though some short term blips may potentially occur to vet current advance orders, so some advance buyers dropping out, but others coming in.

3) I am personally over-committed in property sector, as there are few other sectors with such good forward vison, known demand and good EPS.

All IMV DYOR etc. :-)