Was given the heads up on this share by a contact in London who is involved in building in London. the share price was 360 p and I was in the process of doing my research when Jim Slater hyped it up in the Saturday Telegraph - the sp shot away to 420p and I decided to leave it alone as the hype was in the price as was future earnings improvement. regretted it when the sp went up to a fiver but have waited patiently. The placement gives me the opportunity to get in at the new ground floor. Those who are upset at not being allowed to take part in the placement needn't worry as the sp will most likely sink to or below the placement price - 365p to 370p should give a nice 50% return over a couple of years - feel sorry for those who invested higher with shorter time frames but this is AIM and the companies are run for directors not share owners - they will get their cut by whatever methods suit them.
It is always extremely irritating to see other parties buy in at an extremely advantageous price but at least it had the benefit of a quick fix. Furthermore the benefits were such that the sp was always going to bounce back.
The downward movement from 4.95 was more to do with sellers taking profits. The placing was only on the cards since the recent shrewd purchase. I remain optimistic and look forward to seeing 5.00 plus early in 2016.
In trying to understand the reasons for a Board deliberately setting out to alienate its shareholders presumably a placing is cheaper for the company than a rights issue? SS, for one shall be voting against the dilution of her (modest) holding...
HEADLINE: SHOCK HORROR - P.I.s RIPPED OFF ON STOCK MARKET.
Happens again and again, even in the FTSE 100. The rules say, at least in the FTSE 100, a placing can only be up to 10% of new shares and need not be put to existing holders for a vote, otherwise a rights issue MUST be done.
Did you put this from the RNS to your broker, though? "The Placing is conditional on, inter alia, passing of certain Resolutions at a General Meeting to be held on 13 November 2015". I suppose the agreements to take shares can already have been made, only to be cancelled if voted down. Guess who is going to be voting though - that's right, people and institutions who benefit most from this closed deal.
At least I'm not feeling so bad about my limit order triggering now @378p, just wish I had set it @365p of course. If TEF management stays the course ok, this could work out well for all holders long term. Still leaves a bad taste though.
I had the placing brokers called first thing this morning to be told the £50m placing announced only yesterday afternoon had already closed ! So there was no chance for me, an existing holder, to acquire any shares at the discounted placing price. This is the London market at its worst : a large tranche of cheap stock parcelled out by the house brokers to their friends with other shareholders locked out and forcibly diluted. What a rip off !
Bit peeved myself holding at 420p in my SIPP and had a long term limit order set for 380p to average down, realising that I had bought too high. That order executed for about 377p today, well above the 'placement' price of 360p
A placement, unlike a rights issue, doesn't guarantee existing shareholders a slice of that 360p pie, by the way. In fact private investors may not get a look-in at all. If they do, I will be more or less forced to buy again, plus I also hold TEF in another account @411p which now will have to be averaged down also.
Why 'forced'? Because my investing goals don't really fit with the 2019 profits and onward timeline being talked about by the board for these opportunities. Especially not for the amount of cash i am now having to sink into the company.
GDP may be declining, dazedandconfused, but TEF is a specialist in exploiting the need for affordable homes in London, and that demand isn't going to decline anytime soon, perhaps not for generations.
So, having had a bit of a gripe, there aren't too many other better places for my cash in the foreseeable, and I was up to about 30% cash on hand, having abandoned most of my biotech holdings until after the next US elections NEXT November as well as taken losses in RIO to reduce my commodity market exposure.
This is the price it was at a year ago, so there may be some disgruntled 2015 holders who bought in on the Winter/Spring rise to near £5. A long-time holder myself, i can see the rationale but some may wonder why when construction is declining GDP as of today (but not in East London, as i know!), possibly suggesting a slow-down in the market. However, prices rising along Crossrail route east of Central, and these guys are already there, so United House development locations will be interesting to read about in Placing docs.
Telford Homes is raising Â£50m, gross, through a placing of 13,888,889 new ordinary shares at 360 pence per share.
The group says London has a growing economy with an excellent transport network and yet suffers from a fundamental lack of supply of new homes at an affordable price, and demand remains high from the group's typical customers.
It says that following the recent acquisition of the regeneration business of United House Developments for £23 million the group has a substantial platform from which it can undertake further investment. And it says it has a number of opportunities to acquire new developments that require additional funds beyond those deployed for the acquisition.
The net proceeds will be invested in some of these development opportunities and are expected to be committed within one year and fully utilised within two years.
The board believes that the placing will enable the group to target annual profit before tax exceeding £45m from 2019 onwards and increasing towards £60m thereafter.
The placing is conditional on shareholder approval at a general meeting on 13 November.
Chief executive Jon Di-Stefano said: "Telford Homes is experiencing strong demand for its homes in non-prime inner London and has a sector leading forward sold position of almost four times last year's reported revenue. This is due in part to a fundamental lack of supply of new homes in London at an affordable price.
"The imbalance between supply and demand is not going away and the Group already has a substantial development pipeline to take advantage of this in the coming years. Despite that, there are more opportunities available in the Group's typical locations. The proposed Placing will enable Telford Homes to take advantage of those opportunities and achieve enhanced longer term growth in its output of new homes and therefore in reported profits and dividends paid to shareholders."
Big move for Telford's pipeline, and a significant move up in sp. Weak buy at these levels (@412p), strong buy on 5% pullback from here.
"Acquisition of the regeneration business of United House Developments for £23 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 £22.97 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 £500 million to the Group's existing £1 billion development pipeline. "
probably the clearest indicator is the projected Profit Before Tax in the last investor presentation.
They are projecting a 60% increase from £25m to £40m by 2018
That's all within the current development programme and reflects conservative house price growth. It would only take an uptick in house price inflation courtesy of Crossrail to dramatically
Final div for this year (31/3/15) is forecast @ 5.20p (payable in July) giving an annual total of 10.30p and forecast for next year (31/3/16) is a rise of less than 3p. A similar % increase to the year before, which had no impact on the SP whatsoever !!
Whilst Divi's may support SP's in hard times it is EPS that drives SP growth !
On what basis? ATM, I would be happy if we could break 3.70 and hold it, while a year end target of £4.00 ( representing an annual increase of 12-15%), would strike me as more realistic and quite acceptable !
Some may worry that the booming London housing market is starting to slow, but Telford Homes (TEF) provides the ideal tonic in its interim figures. The east London builder has the kind of forward earnings visibility other house builders would love to replicate. Most homes due to complete during the years to March 2015 and 2016 have already been sold, with significant numbers reserved for the two years beyond. This translates into a forward order book of more than £550m, from a development pipeline worth more than £1.1bn.
Open market completions fell from 222 to 140 for the half, but this is simply a reflection of the timing of current developments; completions are expected to accelerate in the second half. Operating margins rose from 17.1 to 18 per cent, but it's worth noting that selling expenses - around 4 per cent of the revenue from a typical development - are written off as incurred, well before revenue generated from forward sales is crystallised. In fact, higher sales prices at Avant-garde, the group's joint venture development in east London, pushed margins there above 40 per cent. The target margin when appraising new opportunities remains at 24 per cent.
Analysts at Shore Capital are forecasting full-year pre-tax profits of £23m and EPS of 30.3p (from £19.2m and 25.8p in 2013-14) rising to 40p next year. IC View:
Telford's shares trade on a 2015 PE multiple of 12 times, falling to just 9 times in 2016 - which, given that sales for that year are virtually complete, looks achievable. We tipped Telford over four years ago (101p, 22 Apr 2010), but given the strong earnings visibility we stick by our advice. Buy.
<b>Telford Homes Profit Up On Margin Boost From Shoreditch Development
LONDON (Alliance News) - Telford Homes PLC on Wednesday said its pretax profit rose in the first ...</b>
Alliance News26 November, 2014 | 9:08AM
LONDON (Alliance News) - Telford Homes PLC on Wednesday said its pretax profit rose in the first half as a fall in costs offset a decline in revenue, and the group's margins were boosted by the Avant-Garde development in east London.
Pretax profit in the six months to the end of September was GBP9.4 million against GBP7.7 million last year. Revenue was lower, down to GBP65.1 million from GBP73.7 million last year, but a decline in costs offset the fall. Cost of sales fell to GBP42.4 million from GBP53.8 million, outpacing the revenue decline.
The improvement in its margin was driven by the Avant-Garde development in Shoreditch, east London, where price growth in the area has pushed the profit margin for the development to more than 40%.
Telford said its results for the year would be weighted to the second half due to the larger number of open market completions due in that period.
The London-focused residential property developer said it has agreed the sale of more than 600 open-market homes since the start of its financial year in April, above the 515 sold in the year to the end of March. Future revenue via open market and affordable forward sales is more than GBP550 million, Telford said. Its development pipeline is now valued at more than GBP1.1 billion.
The group hiked its interim dividend to 5.1 pence from 3.7 pence last year and said it is "very confident" it will meet market expectations for the full year.
"London is a fantastic place to be building homes, and Telford Homes is developing in locations where people want to live and can afford to live," said Telford Chief Executive Jon Di-Stefano.
Shares in the company were up 0.1% to 359.80 pence on Wednesday.
BRIEF Telford Homes first half profit rises 22 pct
26 Nov 2014 - 07:06
LONDON, Nov 26 (Reuters) Telford Homes Plc
H1 pretax profit 9.4 million stg versus 7.7 million stg year ago
Interim dividend up 38 percent to 5.1 penceper share
Board very confident of meeting market expectations for year to 31 march 2015
Further company coverage: TELF.L
(Reporting By Costas Pitas) (([email protected]; +44 207 542 8024; Reuters Messaging: [email protected] and @Cpitas on Twitter)
Interim results for the six months ended 30 September 2014
Telford Homes Plc (AIM:TEF), the London focused residential property developer, today announces its interim results for the six months ended 30 September 2014.
Continuing sales success across all developments with contracts agreed for the sale of more than 600 open market homes since 1 April 2014 (year to 31 March 2014: 515)
Over 270 of the 307 open market apartments at Stratosphere, E15 sold in the last few weeks
Future revenue secured through open market and affordable forward sales exceeds £550 million
Substantial land acquisitions have increased the Group's development pipeline to more than £1.1 billion of future revenue
Major joint venture formed with Notting Hill Housing Group to develop a site in Stratford for more than 400 homes
Strong margins maintained despite increasing costs
Profit before tax increased to £9.4 million (H1 2013: £7.7 million)
Dividend increased to 5.1 pence per share (H1 2013: 3.7 pence)
Board very confident of meeting market expectations for the year to 31 March 2015
London is a fantastic place to be building new homes. The Group is developing in locations where people want to live and can afford to live, in an environment of chronic undersupply, and this is being clearly demonstrated by the success of every sales launch. Telford Homes is in the incredible position of having over £550 million of future revenue forward sold. This includes most of the homes due to complete in the years to 31 March 2015 and 31 March 2016 and many more in the following two years.
The Group has an unprecedented development pipeline and has the opportunity to achieve and then sustain the ambitious targets for growth set by the Board over the next four years and beyond. The Board remains very confident of a bright and exciting future for Telford Homes.
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