RNS Number : 1305D
Inland Homes PLC
26 October 2020
26 October 2020
Inland Homes plc
("Inland Homes" or "Group")
Inland Homes provides trading update for the year ended 30
Inland Homes ("Inland Homes" or "the Group"), the leading
brownfield developer, housebuilder and partnership housing company
with a focus on the South and South East of England, today issues a
trading update for the year ended 30 September 2020 ahead of its
Preliminary Results which will be announced in January 2021.
Period under review and comparator period
The period in relation to which this trading update relates is
the year to 30 September 2020; comparative information is for the
audited fifteen-month period to 30 September 2019.
We expect revenue for the year to be no less than GBP135.0m
(fifteen-month period to 30 September 2019: GBP147.9m). Our revenue
run-rate is at a higher level than the comparative period,
principally because of the increased number of partnership housing
developments under construction, which continue to generate
significant monthly revenue, achieved completions on land sales and
plots delivered to plan.
Reducing net debt was the strategic priority for the Group this
year, even before the impact of the global COVID-19 pandemic.
As the impact of COVID-19 became apparent, we swiftly
implemented several measures to reduce the Group's cost base,
preserve its assets and conserve cash. This included a successful
placing of new ordinary shares in May 2020 to raise gross proceeds
During the year, we achieved a reduction of Net Debt to
GBP138.3m (30 September 2019: GBP152.3m) comprising gross debt of
GBP149.3m (30 September 2019: GBP163.2m) and cash and cash
equivalents of GBP11.0m (30 September 2019: GBP10.9m). We have
triggered the GBP20m accordion part of the revolving credit
facility ("RCF") with HSBC which increases the facility available
for day-to-day use by the Group to GBP65m.
The Group was trading in line with market expectations to
mid-March 2020, but its results have inevitably been impacted by
the global COVID-19 pandemic.
Throughout the pandemic, in line with the Group's commitment to
health and safety, our priority has been to safeguard the health
and wellbeing of our staff and maintain positive relationships with
our customers, subcontractors and suppliers. Measures were rapidly
taken to ensure full compliance with the Government's 'COVID-19
Secure' guidance and the Group is a signatory to the Home Builders
Federation's 'Charter for Safe Working Practice'.
All but three sites remained operational through lockdown with s
tringent new procedures regarding hygiene, social distancing,
travel and self-isolation in place to ensure the safety of those on
site. Office-based staff have been supported in the transition to
working from home and continue to do-so in line with Government
Sales and marketing suites reopened in May 2020 and we were able
to open the three sites that had been temporarily closed in August
During the period have seen sustained demand from investors,
housing associations and other developers for our high-quality land
assets and our planning expertise, as evidenced by new management
agreements in our asset management division.
We secured the sale of 94 plots at our flagship site Wilton
Park, Beaconsfield and 195 plots at Cheshunt Lakeside,
Hertfordshire, on more favourable terms than the original deals
which had been negotiated and had subsequently aborted prior to the
COVID-19 lockdown. The sale at Cheshunt Lakeside, via the Group's j
oint venture, Cheshunt Lakeside Developments Limited, to a local
housing association, also secured a GBP34.5m build contract for
partnership housing to construct the homes, generating further
revenue and profitability for the future.
Additionally, the Group secured the sale of 208 apartments to
two Build to Rent ("BTR") funds within its Centre Square joint
venture and wholly owned Buckingham House development in High
Wycombe with a total value of GBP52.8m.
During the year we completed the sale of 226 private homes
(fifteen-month period to 30 September 2019: 202) including via
joint ventures but excluding bulk sales to BTR operators. These
were across 11 active sites with an average selling price of
GBP287,000 (fifteen-month period to 30 September 2019: GBP250,000)
which makes these homes attractive for both the first-time buyer
market and those with long-term rental investment intentions.
The average selling price increase is due to a change of sales
mix between houses and apartments sold as well as price differences
in geographic locations. Our net reservation rate per active sales
outlet was 0.69 for the year (fifteen-month period to 30 September
2019: 0.73). However, this increased to 1.12 homes per active sales
outlet during the fourth quarter (the period from 1 July to 30
September 2020) following the re-opening of our sales centres and
increased demand in the marketplace occasioned by the temporary
relaxation in Stamp Duty Land Tax.
Asset management activity
A growing part of the Group's business involves procuring sites
for and providing planning and management services to external
investors. This activity enables the Group to earn substantial fees
with a significantly reduced investment and working capital
requirement. The transactions are generally structured so that they
are non-recourse to the Group.
Our asset management division has grown significantly this year
to six live projects in Greater London which have the potential to
deliver more than 3,500 homes. Notably the 4.4-acre former Homebase
site in Walthamstow, East London and the latest agreement announced
in August 2020 for the development of the 36.7-acre site at Cavalry
Barracks in Hounslow, West London, which is the fifth transaction
that the Group has done with the Ministry of Defence. We expect to
make a planning application for a residentially led mixed-use
scheme of over 1,000 homes shortly for this site.
The planning application for 514 homes at the Master Brewer site
in Hillingdon was called in by the Greater London Authority and
approved by the Mayor of London on 3 September 2020. The planning
application is now awaiting either the release of the planning
consent by the Secretary of State for Housing or for it to be
called in by him for further consideration.
The Group sold 449 plots during the year and has grown its land
bank to a record 11,045 plots (30 September 2019: 7,796), 2,470 of
which have planning consent (30 September 2019: 2,956). The land
bank includes 2,795 plots on strategic sites the majority of which
are held by way of discount to market value options.
At 30 September 2020, the Group has submitted planning
applications on 1,819 of its land bank plots and has 3,961 plots at
a pre-application planning stage. We have also signed a development
agreement with Homes England to develop a 54-acre site in Basildon,
Essex which is expected to have a gross development value in the
order of GBP200m.
Private and partnership housing build performance
At 30 September 2020 there are 415 private homes and 1,302
partnership homes under construction across 13 sites (30 September
2019: 892 private homes, 921 partnership homes).
Our total forward order books sit at GBP50.8m for private homes
and commercial units (30 September 2019: GBP39.3m) and GBP105.8m
for partnership housing contract income (30 September 2019:
GBP123.7m). The partnership housing order book i ncludes GBP40.3m
of future contract income secured during the last two months of the
We continue to focus our efforts on growing the partnership
housing activity as it achieves land sales for the Group and also
secures a forward income stream from the subsequent construction
activities thus balancing the business against any potential
decline in the private sale market in the year ahead.
Whilst the general economic outlook remains uncertain, there is
a fundamental shortage of high-quality, affordable housing across
the UK and particularly in the South and South East of England
which creates a sustained demand for our land assets, homes and
We remain focused on maximising and realising the value in our
land bank in the year ahead, via land sales, private or partnership
housebuilding activity, using our flexible business model to adapt
to changing market conditions.
Stephen Wicks, Chief Executive, commented:
"The past six months have been one of dedicated focus to achieve
the Group's stated strategic aims, namely a refocus for the Group
on a clear strategy of land-focused activities geared to positive
cash generation and net debt reduction. This has been achieved
despite the inevitable disruption and significant impact on our
results caused by the global COVID-19 pandemic."
"We start the new financial year with cautious optimism and a
record land bank: buoyed by sustained demand from customers,
investors, developers and housing associations for our quality land
assets, homes and expertise and equipped with a stronger balance
"We remain focused on maximising and realising the value in our
land bank in the year ahead, whether that be via land sales,
private or partnership housebuilding activity. Our flexible
business model supports us in making these decisions quickly. It is
this entrepreneurial agility that gives us the flexibility to adapt
to movements in a rapidly changing marketplace."
"I should also like to thank all members of our staff and supply
chain for their immense efforts over these unprecedented times and
for their continued support."
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
Instinctif Partners Tel: +44 (0) 20 7457 2020
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
The Company is committed to extensive public and community
consultation 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 and
South East 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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