East London homebuilder Telford Homes said half year profit quadrupled after strong demand for inner London locations and it expects profit to grow significantly in 2013.
Pre-tax profit surged to £6.5m in the six months ended September 30th 2012 from £1.5m in the equivalent period a year earlier. Revenue increased to £78.3m from £58.6m. The group also reported a five-percentage point increase in its operating margin.
The volume of open market completions mostly drove the increase in revenue. A total of 252 open market homes were legally completed in the six months to September 2012 compared to 125 homes during the same period last year.
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"We are achieving a strong rate of sales to both investors and owner-occupiers with the group now over 90% sold for this financial year and already over 60 per cent sold for the following year," Chief Executive Jon Di-Stefano explained.
"Our development pipeline represents five years of gross profit based on the current year and, with the London market remaining buoyant, the board expects Telford Homes to continue to grow over the coming years."
Telford said it has reduced net debt to £31.7m from £54.6m at the end of March and gearing to 45.7% from 82.4% six months earlier. Both are expected to increase again over the next 12 months as sites are bought and developed.
Looking ahead Telford said it is confident that profits for the year to March 31st 2013 will be in line with market expectations and anticipates significant growth in the following year.
The group's corporate loan facility increased to £90m during the period.
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