East London homebuilder Telford Homes posted a healthy increase in annual pre-tax profit and expects strong sales of finished homes in the last six months of the year.
Profit before tax and exceptional items came in ahead of market expectations at £3m for the year ended 31 March 2012 compared to £2.5m the year before. Revenue rose to £124.35m from £121.07m a year earlier.
Gross profit margin rose to 17.6% from 15.1% a year before and operating margin rose to 6.2% from 5.2% with further improvements expected.
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Telford said it anticipates a substantial increase in profit in the next fiscal year with more than 65% of open market homes expected to complete already pre-sold.
Coupled with recent overseas success, both visitor numbers and reservation rates from UK buyers have been well ahead in the first few months of 2012 compared to 2011, Telford explained.
Chief executive Jon Di-Stefano added: "Strong sales and higher margins ensured that profits in the year to 31 March 2012 were ahead of expectations. The fundamentals of the London housing market remain robust and our forward sales position includes over 65% of the open market homes expected to complete in the year to 31 March 2013."
"The Board has previously stated that it expects a substantial increase in profit before tax in the new financial year and this remains the case."
A final dividend of 1.5p has been proposed, giving a full-year dividend of 3p compared to 2.5p before.
Cash and cash equivalents at March 31 fell to £12.42m from £18.84m. Net debt increased to £54.6m compared to £46.1m.
CJ
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