sell or not

lse:inl

#1

is anyone interested in Inland Homes here?
I have been stuck with this one for nearly a year and it is my only housebuilder which is in negative over the year.
Shall I sell and buy others like Telford or hang on in hope/
any advice would be grately appreciated.


#2

lovelove, “Shall I sell and buy others like Telford or hang on in hope?”

I would advise you to have a holding in TEF (perhaps wait for a pullback as they have just put out very good results), but I would also urge you to hang on with INL as something of a recovery play. I’ve just bought myself, despite being a little underwater, after a rather overdone drop, I thought, after going ex-div yesterday.

H1 results (Interim results for the six months ended 31 December 2016) back in March started off with this statement:

** Positive momentum and strategic repositioning ahead of key completions in second half **

Which is exactly what TEF said, yet their H1 results were characterised as disappointing. Stockmarket Wire’s headline? “Telford Homes’ H1 pretax profit has been more than halved to £9.3m, from £21.0m a year earlier.” TEF’s share price dropped to approx @309p.

TEF’s latest results just shot the lights out. TEF’s share price today is at @417p as I type and touched @430p yesterday.

Now, I’m not saying INL is another TEF, but, in smaller builders like these, they don’t have nice even sales spread out throughout the trading year like the big boys in the FTSE 250. It seems some journos don’t really get that.

Unless INL have another foul up like a major contractor going out of business as happened last year, the H2 results (not due until September, but with year end 30th June there will be a trading statement about 3 weeks into July) will very much put the H1 results into proper context and hopefully beat expectations.

Note in the INL H1 results these statements also:
“Group revenue for the period of £32.6 million (2015: £55.1 million) and PBT £4.4 million (2015: £21.4 million), with the majority of profits due to be realised in the second half of the financial year due to the timing of the construction of Inland’s sites and of planned land sales”

[The 2015 £21.4m figure included £14m ’ revaluation surplus’. I don’t fully understand that, I must admit, but without that the figure would have been £7.4m. I’m assuming that revaluation was a one off. It does still seem like a lot to make up, though].

"25% rise in interim dividend to 0.5 pence (2015: 0.4 pence) per share, reflecting the Board’s confidence in the expected performance in the second half of the current financial year "

So, I’ve just added @57.6p and have left room for another tranche if the stock drifts before the trading statement in July.

I don’t think they will have fully recovered from the contractor going bust on them, but the share price is going to be all about how well they’ve handled that situation and how well the business model is holding up to get back on track to show the promise they were doing before that disaster befell them.