Financial Trading Blog
Stock of the day 31/05/2016 – Telford Homes PLC
Despite struggling in the final sector of 2015 Telford Homes ended the year strong results-wise, revealing first half pre-tax profits had more than doubled to £21 million off the back of nearly £140 million in revenue (up from £65.1 million). This helped Telford enter 2016 at just under £4, though like the rest of the market the stock soon suffered under the turbulent trading that defined the start of the year.
By mid-February the stock had fallen all the way to £3.13, and since then has struggled to gain the traction it showed at points in 2015.Between that early in the year nadir and mid-April Telford was trapped in a £3.25 and £3.50, breaking out to £3.60 as the company revealed its latest update. That statement saw Telford boldly ignore the fears of a London slowdown by revising its profit forecasts higher for the next 3 years.
(Source: IT-Finance.com 31/05/2016)
Telford also announced that it had sold £40 million worth of property in its new Isle of Dogs-based Liberty Buildings (that’s 68 of the 105 available flats), a third of which were to international investors in China and Hong Kong. The main catalyst for this international investment seems to have been the increase in Stamp Duty, with overseas buyers pushed into lower bracket properties (Telford’s average price is £450,000).
Whilst that £3.60 peak didn’t last long, with Telford scraping its earlier year lows by mid-May, the stock has bounced back with style since then, sitting at a current trading price of £3.70 (IT-Finance.com, 31/05/2016), effectively a 3 month high.
In terms of the company’s full year update on Wednesday analysts are expecting Telford Homes to post a whopping 24% rise in pre-tax profit to £31.8 million thanks to its expansion in the ever-growing east London market.
Telford Homes PLC has a consensus rating of ‘Hold’ with an average target price of £4.36.
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