Telford Homes (LON:TEF) on Wednesday warned of the impact of Brexit uncertainty on housing demand.
The housebuilder said stagnant property prices in London and continued Brexit-related uncertainty were having a negative impact on the housing market.
Specifically, house prices in the capital have fallen significantly compared to the rest of the UK.
Average house prices in London fell by 0.7% in the year to July, the third consecutive month of decline, figures from the Office for National Statistics (ONS) showed.
In a trading update, Telford Homes said its interim results will show fewer completions in the first half of the year to March 31, 2019 than in the subsequent six months.
Therefore, pre-tax profit in the first half of 2019 is expected to be lower than in the second quarter.
Despite this, the company said it expected to “exceed the £8.7m achieved in the six months to 30 September 2017”.
We also plan to increase interim dividends in line with growth.
John DiStefano, CEO of Telford Homes, said: “Our main objective is to meet the continued demand for housing that London needs.Despite the uncertainty surrounding the outcome of Brexit, the Group continues to perform well. , we are focused on scaling our business, driven by the need for affordable housing, particularly in the rental sector.”
Looking to the future, DiStefano was optimistic. He added: “We are confident that our forward sales approach with increased visibility into profit recognition, enhanced by the success of Built to Rent, will enable us to deliver strong long-term returns for our shareholders. ” he added.
Telford shares fell more than 13% following the warning.
The company was founded in 2000 and is currently listed on the AIM market of the London Stock Exchange.
The company specializes in residential development in the metropolitan area.
The Telford Homes share price is trading -7.62% at 12:43pm (GMT).
