Telford shares plunge after profit warning
Shares in Telford Homes plunged on Thursday after the housebuilder warned profits will take a knock because of delays to a key project.
In a trading update, the London-focused group said profits for 2020 will come in “significantly below” the previous year following a six-month delay at City North in Finsbury Park that will result in a £15 million profit deferral.
Telford said the hold-up is linked to “matters outside of our control” and pointed the finger at “transport bodies” demanding the work be carried out at specified times.
Shares tumbled more than 16% to 292p in morning trade following the news.
Telford has previously flagged Brexit as a key concern and again bemoaned a “subdued” London property market, where sales are being achieved at a slower rate than usual.
However, the group reiterated previous guidance of profits of £40 million for 2019.
Chief executive Jon Di-Stefano said: “A number of factors are affecting our short-term ability to deliver the scale of profits we believe Telford Homes is capable of achieving. “
The developer has been shifting its focus to the rental sector, arguing there is significant support from politicians and investors for build-to-rent developments.
“Our business model is increasingly focused on build to rent and the reduced risk and lower capital requirements it brings,” Mr Di-Stefano added.
“We believe that build-to-rent housing will be one of the keys to solving London’s housing crisis and we expect to significantly increase our output of homes under this new model over the next five years.”