Inland Homes's revenue falls but 'largely unaffected by Brexit'

AIM-listed housebuilder Inland Homes' full-year revenue fell but the company pointed to a number of developments in the pipeline including a new joint venture with a local authority, adding that it was unaffected by Brexit uncertainty arisen since the referendum result.

For the year ended 30 June, revenue fell nearly 11% to £101.9m, compared to the previous year, which resulted in a 3% fall in pre-tax profit to £32.9m.

Chief executive Stephen Wicks said: "To date, the business has been largely unaffected by the Brexit vote and although it remains too early to deliver a definitive judgement, following the robust full year performance and the ongoing supportive market backdrop, the board has good reasons to be confident in the outlook for Inland Homes."

The company, which specialises in brownfield regenerations, said house sales continued at a normal rate since June’s EU referendum, particularly at its price point and within its geographic focus. Forward sales remain “strong” totalling £22.5m, down about 28%, as of 14 October.

Net asset value increased by 30% to £116m due to an £18m revaluation surplus on investment properties.

Revenue from housebuilding declined 22% to £51.5m due to the deferral of 23 construction projects to the 2017 financial year and a bulk sale of 59 units last year.

Rental income increased 165% to £2.1m as the company leveraged income opportunities across its portfolio.

Cash balances of £16.7m marked a decline of 22% from last year, with net borrowings up 56% to £54.6m.

It said the fundamentals of the housing market and government initiatives such as Help to Buy are supportive of Inland Homes’ strategy and are “contributing to the positive outlook” of the company.

During the year, the company expanded its land bank to a record 6,681 plots including 17 sites under option providing control over 330 acres of strategic land with the potential for over 1,600 residential plots.

About 425 plots across eight sites were sold for £43.3m and 147 private homes were sold at an average price of £337,000, up from £264,000 last year, with a further 321 under construction.

The gross margin from the sale of private homes improved from 20.9% to 21.9%.

The company embarked on its first major joint venture with Southampton City Council to develop an 8.9 acre site with potential for over 450 residential units and a gross development value of over £100m.

The company said development projects were progressing well, including Wilton Park, Beaconsfield and Meridian Waterside Southampton, its first full self-delivery project.

Inland Homes bought a 13 acre regeneration project in Cheshunt, Hertfordshire in a joint-venture.

Wicks said it had been a “considerable year of consolidation” for Inland Homes following successive periods of record results as positions the company for growth in the medium to long term, while building its portfolio to capitalise on a number of opportunities.

The company recommended a final dividend 0.9p per share, a 29% increase, reflecting “robust underlying performance and confidence in outlook”.

Shares in Inland Homes were down 0.4% to 62.75p at 0904 BST.