Inland Homes shares plummet as it suspends shareholder buy-backs
Inland Homes’ shares have plummeted 33 per cent on the FTSE AIM All-Share following the news.
The troubled real estate developer has announced it expects to make a heavy loss this year and has suspended its announced share buy-back programme.
It has launched a strategic review of its operations, appointing US investment group Lazard to oversee the process.
Until the review is complete, the buy-back programme will be paused.
It has also announced that its chief executive, Stephen Wicks, will step down from his role at the end of this month and retire.
The company has suffered delays to completions of land sales and planning applications, and is expecting to make an operating loss of £29.3m for the year and has downgraded the value of its net assets to £145.9m.
The group warned there is a drastic shortage of quality consented sites in South and South East England, worsened by a highly complex and unpredictable planning system.
This places considerable demands on developers and means housing delivery continues to lag significantly behind the Government’s target of 300,000 homes per year.
This is despite demand for consented land within the South East remaining very strong despite rising interest rates and inflationary pressures.
Inland Homes argues that the “continual deterioration” of the planning system has made it difficult for the company to predict the timing of planning permissions and the realisation of asset values.
The company’s board is confident that with its track record in land trading and asset management, and with the further operational improvement plans it has in place for its construction activities, Inland Homes’ performance will improve over the coming months.
It has £75m worth of completed sales expected to be finalised in the next financial year amid delays, and is also hoping to finalise a £25m deal before the end of its financial year in September 2022 – which would significantly cut its losses.
Commenting on Wicks’ departure, Simon Bennett, chairman of Inland Homes, said: “As a founder of Inland Homes, Stephen has made an enormous contribution to the Group. He has led the business from its inception, through the Global Financial Crisis and the Covid 19 pandemic, and I would like to thank Stephen for his unwavering commitment and dedication to the business and wish him every success in his retirement.”
The board has named Nish Malde, the group’s chief financial officer to act as interim chief executive alongside his current role.
Inland Homes are in the process of conducting a thorough search for a new CEO.