Trafalgar New Homes swings to profit

AIM-listed residential property developer Trafalgar New Homes swung to a profit in the year to the end of March.

The company reported a pre-tax profit of £204,877 compared to a £619,106 loss the year before, despite a drop in turnover to £2.2m from £3.9m in 2015.

Earnings per share came in at 0.09p versus a loss per share of 0.26p the year before and cash on the balance sheet stood at £278,406 versus £490,770.

The group said market fundamentals remain strong, with robust demand for homes due to chronic undersupply.Trafalgar said that as long as planning restrictions remain obstructive, there will continue to be a considerable shortage of housing supply in the South East.

Trafalgar expressed confidence that its current development programme will deliver profits for the year ended March 2017 and will enable it to meet market expectations.

Chief executive officer Chris Johnson said: “I am delighted to report that the group has returned to profitability. We are confident that the company has a strong development pipeline and that we are well positioned to improve financial performance for FY2017 and beyond.

“Despite Brexit, we believe the market fundamentals remain strong and that huge demand still remains for homes as a result of the chronic lack of supply. We remain committed to building new homes in the South East where we believe there is still high demand, to growing the group's profitability and, in time, rewarding our shareholders through dividend payments.”

At 1550 BST, shares were down 17% to 1.04p.