Trading Update and Notice of Results
24 January 2019
Inland Homes plc
Trading Update and Notice of Results
Inland Homes (AIM: INL) ("Inland Homes", the "Group" or the "Company"), the leading brownfield developer, housebuilder and partnership housing company with a focus on the south and south east of England, provides the following update ahead of its Interim Results for the six months ended 31 December 2018, which will be announced on 7 March 2019.
· A new four year, £65 million revolving credit facility, credit approved by HSBC UK, is expected to complete in February, on improved terms compared to the existing facility with Barclays bank
· Planning committee date scheduled for mid-February 2019 at Cheshunt Lakeside, the Group's 1,853 home transformational brownfield scheme, with an officer's recommendation for approval
· A number of new deals agreed to acquire brownfield sites
· Significant activity and progress on strategic land bank, with planning applications submitted for 200 homes, across three sites
· First "Hugg" temporary modular homes development completed at Chapel Riverside, Southampton, generating £168,000 of annual income
· Sale of 81 private homes completed, at an average price of £238,000 and 63 partnership home equivalents
Stephen Wicks, Group Chief Executive, commented:
"The more than doubling of our debt facilities, on improved terms, provides a strong platform to fund our housebuilding output and complete our transition from a business that was largely focused on land trading towards our stated target of delivering 1,000 homes per annum across private and partnership housing.
"While our model is still focussed on our core land and planning skills, the ability through our construction operations and other business lines to be a partner of choice for Housing Associations, PRS funds, local authorities and other key stakeholders is expected to underpin further improvement to our housebuilding margins through increased scale.
"The short term uncertainty caused by the Brexit debacle is justifiably causing consumer concerns and one can only assume a resolution will be found in the foreseeable future. One thing politicians of all parties do agree on is that the UK has a chronic shortage of new homes that are affordable, and Inland is well placed to benefit from this demand going forward."
Inland is pleased to confirm that a new £65 million revolving credit facility ("RCF"), for a term of four years, has been credit approved by HSBC UK and property due diligence has commenced. The facility includes an accordion of £20 million. The facility will replace the current £20 million RCF with Barclays Bank which is due to expire in November 2019.The HSBC UK facility provides greater capacity to support our growing housebuilding operations on improved terms and that is more compatible with our business model. This facility will be used by the Group in conjunction with borrowings from other lenders to support our growth plans.
Cheshunt Lakeside, Cheshunt, Hertfordshire
The largest planning application submitted in the Group's history, for 1,853 homes together with 18,000 sqm of commercial space and additional community facilities, is currently scheduled to go before the planning committee mid-February 2019 with an officer's recommendation for approval.
On securing a consent, Inland Homes intends to either enter into a Partnership Housing transaction with a major PRS operator, or develop the site out with a financial partner.
Planning applications have been submitted on three strategic sites, which have received draft allocations for a total of 200 units. A number of planning permissions in the strategic land business, for up to 280 homes, are expected to be received in the current financial year.
The Group announced in December 2018 that it had exchanged contracts to acquire a site with planning consent for 325 Homes in Dagenham, Essex and is in advanced negotiations to develop the project out with a major housing association. The acquisition of three further brownfield sites, with the potential to deliver up to 600 homes are agreed.
The Group achieved 81 legal completions of private home sales in the first half of the year at an average price of £238,000 and 63 partnership home equivalents. The current value of forward sales is £15.3 million. As previously stated, although the Group has a record 1,550 homes under construction, across 14 sites (including four joint ventures and three Partnership Housing Contracts), the number of legal completions in the current financial year is expected to be lower than during the previous financial year, due to the timing of occupations on large developments of apartments.
We have four live sales outlets with a number of major launches coming forward this spring. Our lower priced good quality homes remain in demand and of particular note is our development of 94 homes at Jasmine Park, Ipswich where 22 homes have been reserved at prices over the original budget in the first 12 weeks since launch. The Group does not accept part exchange units and the principal sales aid is the Government's Help to Buy scheme.
Modular Homes Business
Our modular homes business, Hugg Homes, has completed its first development at Chapel Riverside, Southampton. The 22 units are fully let to Southampton City Council and private tenants, generating a total rental income of £168,000 per annum.
A second scheme of 32 units is under construction at Cheshunt Lakeside, where Broxbourne Council has signed a three year lease on the entire development at an annual rent of £319,500.
Having secured its registration from the Regulator in late 2018, Rosewood has completed the transfer of its first property in Amersham, Buckinghamshire. This property will be let at an affordable rent as required under a Section 106 agreement.
Rosewood has a current pipeline of 144 units that it has agreed to acquire. These are a mix of shared ownership, social and discounted market rent units.
Market Abuse Regulation
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain
Inland Homes plc:
Tel: +44 (0) 1494 762450
Stephen Wicks, Chief Executive
Nishith Malde, Finance Director
Gary Skinner, Managing Director
Panmure Gordon (UK) Limited
Tel: +44 (0) 20 7886 2500
Tel: +44 (0) 20 3727 1000
Notes to Editors:
Incorporated in the UK in 2005, Inland Homes plc is an AIM listed specialist housebuilder and brownfield developer, dedicated to achieving excellence in sustainability and design.
Inland Homes acquires brownfield land in the South and South-East of England principally for residentially led development schemes. The business then enhances the land value by obtaining planning permission, before building open market and affordable homes or selling surplus consented land to other developers to generate cash.
The Company is committed to extensive public and community consultation in order to ensure that, where possible, local community needs and objectives are met.
Inland's aim is to create sustainable communities and homes which set a benchmark for all future developments in the South of England. The Company is always looking for brownfield sites without planning permission for future development.
For further information, please visit the Inland Homes website at www.inlandhomes.co.uk.
Hugg Homes - www.hugghomes.co.uk
Rosewood Housing - www.rosewoodhousing.co.uk
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