I Read The News Today Oh Boy! 2-Jan-2018

2nd Jan '18 by matylda

4 comments 2800 reads

Morning All!

Hope you all had a great break, I certainly did.

Just one update today and I suspect it will be a rather quiet week…

Inland Homes ( Inland Homes (LON:INL) ) – 60p – £120.6m – PER 7.75

Trading Update – Headlines with “Strong end of year momentum across the business supporting positive outlook for 2018”. There is also the following statement “well placed to achieve further significant growth in 2018”.

Generally looks OK here and this recent update is certainly positive. If it wasn’t for the massive debt I could be interested.

Here’s to a prosperous year!

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About the Author

Matylda

Premium Member

4 comments

FREng

2nd Jan '18

Happy New Year, Matylda! Thanks for your early morning insights last year and best wishes for 2018.

matylda

2nd Jan '18

Thanks for the wishes and many thanks to you and the educated others here.

LongValue

2nd Jan '18

Inland Homes does have substantial gross debt of around £94.5 million. However, the debt is secured and the interest is covered some four times. Importantly, 100% of total borrowings are repayable after one year and 54% are repayable between three to five years. This includes £20 million for development activities expiring in Autumn 2019 and £25 million for land purchases expiring in three years. With a year end cash balance of £26.5 million (Its finance costs in 2017 were £7 million), I would suggest that there should be no immediate cash flow issues. If there was a sustained meltdown in the residential property market or a major increase in interest rates there would clearly be problems. That said, it does have multiple revenue streams from the property market including joint ventures with housing associations and rental income.

Interestingly, the company has a large proportion of properties for which it's seeking planning consent but it does not recognise the planning gains until sales are contracted. Basically, it argues that its assets are substantially undervalued and therefore its gearing is lower.

Incidentally, I am invested in the company.

matylda

2nd Jan '18

Thanks for that, much appreciated. I can of course see the attractions for those willing to accept the debt overheads. I just feel more comfortable with less. All the best with the holding of course.

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I Read The News Today Oh Boy! 2-Jan-2018

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About the Author

Matylda

4 comments

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