East London housebuilder has taken advantage of weak construction market
East London housebuilder Telford Homes has said it has saved about 拢1m in the last six months by negotiating cheap deals with its contractors.
The builder, which today reported half year pre-tax profits down over 50% to 拢1.4m, said it had managed to take advantage of the market by buying building work 鈥渁t the right times.鈥�
Chief executive Jon Di-Stefano said: 鈥淲hen we鈥檙e negotiating on day one with contractors we鈥檝e in the last six months that we鈥檝e got tenders in for a bit less than we鈥檝e been budgeting for.鈥�
Finance director Katie Rogers said the savings had been made on the negotiation of around 拢50m of work to be carried out over the next couple of years. However Di-Stefano said he didn鈥檛 think it marked a wider downturn in tender prices. 鈥淲e鈥檝e just been able to do well on individual contracts by buying at the right time,鈥� he said.
Di-Stefano said Telford remained on course for an expansion in sales and construction next year, with analysts predicting pre-tax profits to grow threefold, and full-year revenues to jump to 拢130m, from 拢120m in the year ending March 2011.
Figures for the six months to 30 September showed revenues flat at 拢58.6m, with an increase in costly marketing activity related to next year鈥檚 sales, and in financing costs accounting for the drop in profits. Di-Stefano said that sales ran 30% ahead of the same period last year, with much of those pre-sales, meaning the revenue is due to come in in later financial periods.
Di-Stefano added that the government鈥檚 recently announced mortgage indemnity guarantee will 鈥渉elp sales鈥� and may allow the firm to refocus its land buying efforts in areas popular with first time buyers.
The half year statement said: 鈥淎 strong balance sheet and a reputable brand put Telford Homes in an excellent position to take advantage of site acquisition opportunities as they arise and to generate higher profits and continue to improve margins over the next few years.鈥�
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