Trading Update. 1 April 2014
Trafalgar New Homes, the AIM quoted property developer operating in southeast England, today provides an update on trading for the financial year to 31 March 2014, and in particular, on sales at its Oakhurst Park Gardens development in Hildenborough, Kent.
Since marketing commenced in the autumn last year, the Company has had considerable interest in Oakhurst Park Gardens from prospective buyers. The 12 unit development included planning permission for limited private garden space and a condition for the rest of the circa two acres surrounding the development to be retained as private open space for residents. Following advice from its planning consultants, the Company applied for this planning condition to be removed, which was expected to be a formality, to enable larger private gardens for each home and be more attractive to prospective buyers. Following significant delays beyond the Company's control, the application was eventually approved on 27 February 2014, enabling the Company to reignite its sales effort.
Despite the interruption, the Company had secured interest from prospective purchasers for four of the units, but could not proceed until the planning permission was amended, and these have now been converted to sales. The Company had also been in negotiations with an investor buyer for the purchase of the eight remaining units. However, after careful consideration it has been decided that it is not financially economical nor in the best interests of the Company to proceed with the proposed transaction. The Company therefore reports that as at 31 March 2014, it had sold four units at Oakhurst Park Gardens, with a further two now under offer. The Board is confident that further sales will be achieved at Oakhurst Park Gardens in the next quarter.
It had been anticipated by the Company that the twelve units at Oakhurst Park Gardens would have been sold with a view to the profit being generated being recognised in the financial year ending 31 March 2014. The effect of the unexpected planning delays and the decision to not proceed with the investor buyer has caused the Company to be able to only include the sale of four units at Oakhurst Park Gardens in the 2013/2014 financial year. As a result, the financial results of the Company for the year ended 31 March 2014 will be significantly below market expectations. It was also the Board's intention to pay a dividend as a result of sales at Oakhurst Park Gardens, but this also will be postponed and the Board will seek to pay dividends as soon as financially possible.
Elsewhere, construction work is underway on the two house scheme at Ticehurst, East Sussex and at Sheerness, Kent, contractors are pricing up the six house scheme to start construction in the near future.
At the Company's major site at Staplehurst, Kent, the planning process is being progressed and the directors are confident that planning will be forthcoming during the first half of this year. On the site at Burnside, Tunbridge Wells, the planning process is also being progressed to obtain consent for four houses on the property, to replace the six apartment scheme which the Company has planning permission for and which is expected will yield a greater profit.
Also in the pipeline, contracts have been exchanged to buy a two house development project in Borough Green, Kent, with planning permission and work on site will be starting within the next three months. In addition, negotiations are taking place to buy two further sites conditional on planning consent being granted in Tunbridge Wells, Kent (10 houses) and Matfield, Kent (2 houses ).
Enquiries:
Trafalgar New Homes Plc
Christopher Johnson +44 (0)1732 700 000
Allenby Capital Ltd -
Jeremy Porter/James Reeve +44 (0)20 3328 5656
Yellow Jersey PR Limited
Dominic Barretto/Anna Legge +44 (0)7768 537 739
Notes to Editors:
Trafalgar New Homes is the holding company of Combe Bank Homes, a successful residential property developer operating in the southeast of England. The founders of Combe Bank Homes have a long track record of developing new and refurbished homes, principally in Kent. Combe Bank Homes was incorporated in 2006 and was acquired by ISDX quoted Trafalgar New Homes in a reverse takeover on 11 November 2011.
The Company's focus is on the select acquisition of land for residential property development. The Company outsources all development activities, for example the obtaining of planning permission, design and construction, and uses fixed price build contracts. This enables the Company to tightly control its development and overhead costs.
The Company focuses on the regions of Kent, Surrey, Sussex and the M25 ring south of London and targets development sites of up to 20 homes, with sales prices typically ranging from £100,000 to £750,000 per unit, although larger projects are undertaken.
For further information visit www.trafalgar-