An ebullient trading statement from Inland Homes (INL) see shares in the Amersham-based property-developer and house-builder notch up a healthy 11.2% to 33.62p as the group reveals a strong performance for the year to 30 June will see profitability ahead of market expectations.
Inland's decision to scale up its own house-building programme is proving lucrative with the group achieving the sale of 55 homes and generating revenues of £11.4 million up to the end of June compared with the same period in 2012 when just nine homes were sold to create £1.7 million in turnover.
The group also told shareholders that its combined development programme with Drayton Garden Village Ltd comprises of 453 homes across seven sites with current forward sales either agreed or contracted at £42.5 million.
When the group reported its half-year results in March, Inland delighted investors with a three-fold rise in pre-tax profit to £3.1 million. At the time, house broker finnCap was cautious about second-half performance, raising revenue estimates by a cagey £5 million; less than half of the turnover the group succeeded in creating up to 30 June.
But Inland Homes is more than a £60.9 million cap house-builder with attractive southeastern exposure. The 23 July update also reported strong demand for its 'land with planning permission'. In the financial year just ended, the group disposed of 355 plots for turnover of £15.4 million compared to no plots sold in the year to 31 March 2012.
Over the year to June, Inland secured planning permission on a number of significant sites including 265 plots at Carters Quay, Poole and 101 plots at St John's Hospital, Chelmsford, Essex.
The Chelmsford site was was purchased for £9.7 million with plots effectively costing almost £100,000 each but finnCap's Duncan Hall posited that 'for residential property which may command prices in excess of £600,000, the group believes the land profit in the transaction justifies the entry price.'
Of course Inland is operating in an extremely competitive land market but it continues to seek out and secure opportunities. The group's trading update underlines this commitment, illustrated by the developer's options over a number of sites and exchanged contracts for the unconditional purchase of four further sites for a total consideration of £9.0 million. These opportunities provide the potential for an additional 366 residential plots.
The group also remains in relatively rude health in terms of financials, finishing the year with cash balances of £12.2 million and net borrowings of £3.7 million.