Inland Homes warns on profits ahead of final results

South East England-focused housebuilder Inland Homes updated the market on its trading on Friday, ahead of its preliminary results for the 12 months ended 30 June, which will be announced in September.

The AIM-traded company said it has maintained a considerable focus on successfully piloting a large number of sites through the planning system.

It said it currently has planning applications submitted on 1,268 plots and is expecting 246 plots to receive consent over the coming weeks.

Inland said it also has a further 1,225 plots with planning permission or a resolution to grant permission in place subject to signing a Section 106 Agreement.

The company’s forward order book currently stands at £23.4m, the board said, with 315 homes currently under construction across eight sites and further schemes expected to come on stream in the first half of the current financial year.

During the year, the group secured 147 legal completions, down significantly from 248 a year earlier.

The board said the reduction in the number of units sold was in part due to the delivery of a specific development in the previous year where there was a bulk sale of 59 units.

Additionally, a contractor engaged by Inland Homes on four of its development sites ran into financial difficulties and entered into administration.

In response, Inland Homes has taken full control of the relevant sites and of all related construction activity that was formerly in the hands of the contractor.

The board said this resulted in the delay of 23 legal completions which will now defer into the current financial year.

“As a result of the reduced number of legal completions and further costs to be incurred to complete on the four development sites, the group's profit before revaluation of investment properties and tax is expected to be marginally lower than the market consensus forecast of £15.9m,” Inland’s board said in a statement.

With delivery of the delayed units set for the new financial year and strong self-delivery capabilities in place, it said it remains confident in the outlook for this area of the business.

"We are confident that our underlying business is extremely robust and the demand for our high quality, lower cost homes remains strong,” said CEO Stephen Wicks.

“The appetite for our consented land is similarly unabated, while the size and quality of the land bank we are amassing has exceeded our targets.

“While we have been somewhat impacted in the short term by one of our contractors going into administration, against the current supportive market environment, we look to the future with considerable optimism,” Wicks added.