Telford-homes

Telford Homes

LN: TEF

£233m market cap

306.5p last close

Listed on AIM in 2001, Telford Homes is a London-focused residential property developer. Its portfolio includes open market sales (in multi-occupancy, including mixed-use, developments), the build-to-rent subsector (alongside investment partners) and affordable homes delivered to housing associations.

Investment summary

Telford Homes represents a pure play on London’s clear requirement for the delivery of more good-quality, new build homes. Management is continuing to orient development activities towards the more robust build to rent (BTR) subsector – including the recent announcements of two strategic partnerships – although there will be a near-term dip in earnings as the pipeline transitions, factoring in isolated other project delays and current market conditions also. Regaining and sustaining historic profit levels would warrant a share price significantly ahead of the present valuation. FY19 results were published on 29 May and we are reviewing our forecasts.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 316.2 53.8 46.0 49.4 6.2 N/A
2019A 354.3 43.1 40.1 44.5 6.9 6.5
2020E 377.4 32.5 25.0 26.3 11.7 5.4
2021E 453.7 36.9 30.4 30.6 10.0 3.9
Last updated on 17/06/2019
Industry outlook

Citing a chronic housing shortage, the Mayor of London’s office has a clear agenda to raise new home building rates to c 65,000 per year over the next 10 years compared to a recent average of less than a third of that level. Medium- and long-term population and household growth expectations further underpin this demand. The tenure mix is expected to continue to move towards a higher proportion of private rental homes.

Last updated on 17/06/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 75.2
Forecast gearing ratio (%) 29
Price performance
%
1m
3m
12m
Actual 13.1 (1.5) (30.2)
Relative* 13.3 (2.6) (26.8)
52-week high/low 438.0p/267.0p
*% relative to local index
Key management
Andrew Wiseman Chairman
Jonathan Di Stefano CEO
Katie Rogers CFO