Telephone: 01732 700 000
Combe Bank Homes Ltd and Beaufort Homes Ltd are the trading entities and wholly owned subsidiaries of Trafalgar Property Group Plc .
For information about Combe Bank Homes: www.combebankhomes.co.uk For information about Beaufort Homes: www.beauforthomes.co.uk
Welcome to the Investor Relations website for Trafalgar Property Group Plc.
Trafalgar Property Group is a public limited company whose shares are quoted on the London Stock Exchange AIM Market.
Combe Bank Homes Ltd is a wholly owned trading subsidiary, which was established in 2006, and is a successful Regional property developer based in Kent.
Its management has a track record of many years experience in undertaking new and refurbished residential property projects in South East England.
Beaufort Homes Ltd is a wholly owned trading subsidiary, established in 2016 and acquired in March 2018, which has experience in land assembly and residential development, and its focus is in the housing and care for the elderly market, developing properties on the assisted living and extra care model.
Combe Bank Homes Ltd property portfolio consists of:
1. Sites developed and for sale:
2. Sites undergoing development:
3. Sites under option or with purchase terms agreed in principle:
Beaufort Homes Ltd has option agreements to acquire 13 properties and is in negotiations to enter into option agreements to acquire three further sites.
Trafalgar Property Group Plc is a holding company, owning the entire share capital of Combe Bank Homes Ltd, a regional property developer based in the South East of England, and owning the entire share capital of Beaumont Homes Ltd, a property residential developer specialising in the assisted living and extra care sector for the elderly . More information here.
James Dubois, FCA. More information here.
Christopher Johnson, Alex Johnson, Dan Stocks, Norman Lott FCA.
More information here.
Directors Committees, more information here.
Incorporated in England, UK. Main country of Operation: UK
Securities in issue: 425,190,380 shares of 0.1p per share and deferred shares of 0.9p
For significant shareholders: please click here.
There are no restrictions on the transfer of shares.
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For Nominated Adviser and other key advisers: please click here.
For information required under AIM rule 26: please click here.
01732 700 000 -
The Group benefits from availability of bank finance on competitive terms, Combe Bank Homes Ltd having established a strong asset base and income cover over cost of borrowing, a sound track record even during the exceptionally difficult market conditions following the 2008 financial crisis, and good relationships with a range of lenders. This is an advantage over many competitors who are unable to raise bank finance at all. The Chief Executive also has cash resources available to invest as required. The market listing of the shares may in due course be a further source of capital funding. The Group intends to capitalise upon its funding sources to acquire and develop prime new build land sites on a favourable cost base, where opportunities arise and it is prudent to do so.
The Group is focused on its niche market of developments consisting 4 to 20 units. Competition to purchase development sites in this unit size range is low, as these sites are too small for national and major regional house builders who require greater scale to cover administrative overheads, and are too large to be funded by the small jobbing builder. Within this niche market, there are opportunities to negotiate land acquisitions on favourable terms.
The Group has a small management team with fast and easy lines of communication, and key decisions can be taken quickly and positively.
The Group outsources construction work and professional services, thereby operating a minimal Head Office operation with low fixed overheads, and can thereby scale the trading activity up or down very quickly to react to changing market conditions and opportunities.
Consequent upon the acquisition of Beaufort Homes Ltd, it is intended that Combe Bank Homes and Beaufort Homes will be run as distinct businesses. Combe Bank Homes will continue to develop residential properties in the South East of England and Beaufort Homes will continue to expand its land bank and development sites through the identification of suitable land for assisted living schemes, securing the land through option agreements and obtaining planning permission.
Effective implementation of this strategy will be judged by achievement of anticipated increased earnings per share.
Principal risks & uncertainties
Set out below are certain risk factors which could have an impact on the Group's long term performance. The factors discussed below should not be regarded as a complete and comprehensive statement of all potential risks and uncertainties facing the Group.
The principal risks and uncertainties facing the Group are:
1. Any possibility that lending criteria from the Group’s bankers may harden with little prior notice.
2. Construction costs may escalate and eat into gross profit margins.
3. Heavy overheads may be incurred especially when projects have been completed and before others have been commenced.
4. The Group could pay too much for land acquisitions.
5. The Group might fail to adhere to good corporate governance policies.
6. The Group’s reliance on key members of staff.
The Group considers that it mitigates these risks with the following policies and actions:
1. The Group affords its bankers and other lenders a strong level of asset and income cover and maintains good relationships with a range of funding sources from which it is able to secure finance on favourable terms.
2. Construction costs are outsourced on a fixed price contract basis, thereby passing on to the contractor all risk of development cost overspend, including from increased material, labour or other costs.
3. Most other professional services are also outsourced, thus providing a known fixed cost before any project is taken forward and avoiding the risk that can arise in employing in-
4. Land buying decisions are taken at board level, after careful research by the Directors personally, who have substantial experience of the house building industry, potential construction issues and the local market.
The Group focuses on a niche market sector of new home developments in the range of 4 to 20 units. Within this unit size, competition to purchase development sites from land buyers is relatively weak, as this size is unattractive to major national and regional house builders who require a larger scale to justify their administration and overheads, whilst being too many units for the jobbing builder to finance or undertake as a project. Within this market, there are opportunities to negotiate land acquisitions on favourable terms. Many competitors who also focus on this niche have yet to recapitalise and are unable to raise finance.
5. The Group has a rigorous corporate governance policy appropriate for a publicly quoted company now listed on AIM.
6. Many of the activities are outsourced and each of the Directors is fully aware of the activities of all members of staff enabling adequate cover when needed.
Combe Bank Homes strategy
Combe Bank Homes will consider development opportunities in its chosen arrea of operation, to further its residential development activity.
Additionally the company has a strategic site at Staplehurst, Kent under option. The Directors consider that this site presents an interesting opportunity and the planning focus is on achieving planning permission for an extra care or assisted living scheme on this site.
Demand for new housing in the South East remains strong and continues to benefit from the Government’s Help to Buy scheme. Whilst the uncertainty over the UK’s future relationship with the EU may impact parts of the market, the Directors believe that the pressure to increase housing stock in the southeast of England is likely to open up opportunities to bring strategic land through the planning process. The Directors believe that areas without an up to date local plan or with insufficient land supply offer the greatest potential. With the support of the range of measures to encourage house building set out in the recent Government budget, the Company is seeking to take advantage of the opportunities that present themselves.
Beaumont Homes strategy
Of the option agreements that Beaufort Homes has secured, a planning application has been submitted on one site for residential redevelopment, and a ‘pre-
Beaufort Homes management has more than 50 years experience in land assembly, housing developments, construction and the growing assisted living/extra care market. The Enlarged Group will specialise in the identification of suitable sites within the M25 corridor and land opportunities in the affluent towns and villages of the South East of England.
The Enlarged Group will have a dedicated land department to identify further suitable sites, approach land owners and agree a nominal option fee with each owner. The Enlarged Group will then apply for planning and, when successful and if appropriate, will exercise its option.
Typically, each assisted living scheme is expected to consist of 50-
The Directors believe the Enlarged Group will have the capacity within its existing management and network to significantly increase its development pipeline of assisted living schemes and grow the Company organically. This will not, however, preclude the Enlarged Group accelerating profitability by selective acquisitions that would integrate with, and add significant value to, the long-
Market Dynamics in the South East
The decision to exit the European Union at the end of June 2016 was unprecedented. It led to an immediate drop in the value of sterling and a sell-
The market fundamentals remain strong with robust demand for homes as a result of chronic undersupply. A recent report by the Resolution Foundation showed that home ownership in the UK had dropped to its lowest levels in 30 years, with outer London seeing the second biggest drop of 13.5% to just under 58%. Further, the Bank of England’s decision on 4th August 2016 to reduce interest rates to a record low of 0.25% should reduce the cost of financing and may also provide potential buyers with cheaper mortgages. Nevertheless, we strongly believe that as long as planning restrictions remain obstructive there will continue to be a considerable shortage of housing supply in the South East.
These fundamentals provide attractive opportunities for house builders with the right strategic focus and access to finance. We are confident that our focus on traditional housing for a wide range of buyers in the South East, along with the price of our current housing stock, will keep sale prices stable and we will continue to attract customers. The recent increases in Stamp Duty Tax are mainly applicable to the luxury end of the market and do not adversely affect our operations. The Group remains committed to building new homes in the South East that are in such high demand.
Central London is a market largely divorced from the rest of the UK, in that it operates as a global city and attracts global funds. Pre-
Mainstream Markets five-
5 years to end 2021
Forecast data from Savills Research. Trafalgar New Homes Plc takes no responsibility to prospective investors for its assessment of future market trends. Investors should make their own assessment of market prospects taking their own independent advice.
Latest market analysis
The residential property market in the UK has been depressed since the global financial crisis and has been severely constrained by the consequent lack of funding for mortgage applications. However, recent research indicates that the market is now showing signs of stability. The Office for National Statistics (ONS) estimates that in the 12 months to March 2013 house prices in the UK rose by 2.7 per cent., buoyed by larger rises in London and the South East. In addition, the Government has launched a number of initiatives, such as The National Planning Policy Framework, NewBuy, Help to Buy and the Bank of England’s Funding for Lending, targeted at stimulating the market:
● Help to Buy – Help to Buy is a £5.4 billion package announced in the March 2013 budget designed to tackle long term problems in the housing market. It consists of two schemes, an “equity loan” where the government will lend a buyer up to 20 per cent. of the value of a new build property and a “mortgage guarantee” where lenders will be incentivised to make more mortgages available to people with small deposits. Now extended to 2020.
The “equity loan” scheme became effective from 1 April 2013 and is available for buyers with a minimum 5 per cent. deposit but only for new build homes with a value of up to £600,000. The loan is interest free for the first five years and from year six a fee of 1.75 per cent. is payable which rises annually by RPI inflation plus 1 per cent.
The “mortgage guarantee” is available on either new build or existing properties but is scheduled to end in December 2016.
● The National Planning Policy Framework (NPPF) – The NPPF was published by the Department for Communities and Local Government in March 2012 and was designed to speed up and simplify the planning approval process. In January 2013 the DCLG also launched the Red Tape Challenge which planned to cut red tape by removing or amending around 100 small housing and construction regulations and make sensible changes to regulatory burdens.
● NewBuy – NewBuy was launched by the Government in March 2012 and is aimed at first time buyers and those who already own a home who only have funds for a 5-
● Funding for Lending (FLS) – The £80bn FLS was set up by the Bank of England in July 2012 to help provide cheaper loans and mortgages to both individuals and businesses. Banks and building societies have been given access to cheap money on the condition that they then lend this on at competitive rates. The scheme will close in January 2018.
● Help to Buy: Starter Home -
In June 2016 a referendum voted to leave the European Union (Brexit). An initial assessment of the implications can be found here.
Links to latest market commentary for London and the South East
Savills Spotlight -
The uncertainty over the UK’s future relationship with the EU will continue to cast a shadow over economic growth throughout 2018, leading to a more cautious outlook amonst investors across all sectors…. Although sentiment and activity may be subdued, it doesn’t mean investment will stop. The decline in mortgaged buy to let investors will create opportunity in the build to rent market, while investment focus will shift to the regions.
Savills Spotlight -
… return to growth in 2019-
Savills Spotlight -
The effects of the Global Financial Crisis, which began in 2007, are still being felt a decade later, and will continue to influence the housing market in the years ahead.
One year on from the Brexit vote, prime London house prices have continued to soften, with small falls recorded in both central and outer prime locations over the past quarter.
Savills Spotlight -
Headline rents continue to slide across prime London and the commuter belt in the face of uncertainty. But pockets of the market are bucking the trend – some as a direct result of the Brexit vote.
Housing associations, along with small and medium-
Savills Spotlight -
It’s a rare moment when we can say that the prime housing markets beyond the capital have performed better than London. But that has been the case since the middle of 2014.”
Savills Brexit Briefing -
“Sentiment will determine the impact of the Brexit vote in the short term.” “Ultimately, housing affordability will determine the impact of the vote to leave the EU on house prices.”
“Low levels of house building has resulted in a market that is fundamentally undersupplied.This has not changed.”