TIDMINL
RNS Number : 4044L
Inland Homes PLC
30 April 2020
30 April 2020
Inland Homes plc
Trading Update
Inland Homes ("Inland Homes" "the Group" or "the Company"), a
leading brownfield developer, housebuilder and partnership housing
company with a focus on the south and south east of England, today
provides a further trading update on the evolving COVID-19 pandemic
and the further actions taken by the Company in response to this
unparalleled event. The Company's interim results for the 6 months
ended 31 March 2020 are expected to be released towards the end of
June 2020.
As referred to previously, the Covid-19 pandemic has impacted
the Group's interim results, with five significant transactions,
three of which were to major listed housebuilders, being aborted in
March 2020. The total sales value of these transactions was
GBP46.2m. Had these transactions completed as expected, the Company
would have achieved the significant reduction of debt planned by
management for the first 6 months of the year.
Trading update and financial guidance
The Group achieved legal completions of 136 homes (including
joint ventures) during the six months to 31 March 2020 at an
average selling price of GBP284,000. The average sales rate was
0.71 unit per active outlet during this period. Although all our
sales centres have now been shut, we are continuing with our sales
and marketing activity remotely.
At 31 March 2020 the Group had forward sales of GBP30.0m
including the sale of a hotel in Bournemouth to Aviva for GBP13.3m
as well as a Partnership Housing order book of GBP72.7m.
There is little evidence that the UK's national quoted house
builders are in the market to purchase land at the present time,
however we continue to receive approaches from smaller and medium
sized housebuilders for the purchase of sites with planning
consent. We are also being approached by housing associations and
build to rent funds for bulk purchases of apartments under
construction. Solicitors have been instructed on the forward sale
of 113 apartments for a gross value of GBP22.5m.
We have four Partnership Housing sites under construction for
Registered Providers and work is progressing albeit with reduced
manpower, which currently generate approximately GBP6.0m of
cashflow per month.
Our land bank now stands at a record 9,143 plots of which 2,881
have planning consent. Our growing strategic land portfolio where
most of the plots are controlled by discount to market value
options has increased and now comprises 3,658 plots. We continue to
achieve a good success rate in getting sites allocated for
development in local plans.
At 31 March 2020, the Group had cash balances of GBP17.8m and as
a result of the abortive land disposals our net debt was GBP150.3m.
We had undrawn facilities of GBP7.4m within our facilities as well
as an accordion facility of GBP20.0m with HSBC. Discussions are
ongoing in relation to renewing the revolving credit facility of
GBP17.2m secured on a portfolio of sites with professional
valuations of GBP26.5m, expiring on 22 August 2020, and the lender
has indicated that investors in the facility are positive about
renewing. In addition, Inland has a land facility of GBP4.0m
expiring on 12 August 2020 where the lender has agreed in principle
that they will extend the facility for a further six months. The
Group expects to repay this facility before its expiry from the
sale of the related plot of land.
In line with the Group's commitment to health and safety,
Inland's priority continues to be the health and safety of all our
employees, sub-contractors and customers. Three of our sites have
been closed and work is continuing at seven sites where processes
in line with Public Health England guidance on social distancing
can be achieved and where early cash generation may be achieved. In
addition, the business has carried out a range of additional
measures, including protocols over hygiene, social distancing,
travel and self-isolation and our health and safety personnel
continue to monitor the position.
As reported on 30 March 2020 the Board acted quickly in response
to the COVID-19 pandemic taking a number of immediate measures to
reduce the Group's cost base and to conserve cash. These measures
include:
-- The Executive Directors and the Operational Board taking a
voluntary salary cut of 50% per annum for the foreseeable future.
In addition, the Executive Directors have deferred taking their
annual bonus for the 15 month period ended 30 September 2019;
-- The Non-Executive directors have taken a temporary voluntary
reduction in their fees of 25% per annum;
-- All staff working remotely earning more than GBP40,000 per
annum have taken a voluntary salary reduction ranging from 9% to
40% per annum;
-- Over 70 members of staff have been furloughed under the Coronavirus Job Retention Scheme;
-- Temporary closure of some sites;
-- Discretionary overhead expenditure reduced to minimum levels;
-- No capital expenditure unless absolutely necessary; and
-- Cancelling the second interim dividend of 2.25p per share
which was due to be paid on 12 June 2020, providing a cash saving
of GBP4.6million.
The impact and extent of COVID-19 is clearly uncertain at this
stage as are its ramifications on our financial results for the
year ending 30 September 2020. We are assuming that all planned
sales of our homes are delayed by at least two months and that the
majority of our land sales will be delayed by between two and six
months. This includes the major land sales that were expected to be
achieved for the half year ended 31 March 2020. These delays will
result in revenues, gross and operating profit in the period being
impacted significantly. The Partnership Housing revenues are
expected to continue in line with our expectations as work on these
sites are continuing at present.
Stephen Wicks, Group Chief Executive, commented:
"The Group has taken a number of measures in these unprecedented
times to conserve cash and protect the underlying value of the
Group's assets."
"I should like to take this opportunity to thank all our members
of staff in working with us to manage the business through these
difficult times."
Enquiries:
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
Dominic Morley
Erik Anderson
Instinctif Partners Tel: +44 (0) 20 7 457 2020
Mark Garraway
James Gray
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation EU 596/2014.
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 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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END
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