(Reuters) – Telford Homes Plc cut its full-year profit forecast by at least 10 million pounds on Thursday, sending the homebuilder’s shares down as much as 13 percent.
Profit before tax is expected to be about 40 million pounds for the year ending March 31, lower than its earlier forecast of more than 50 million pounds, on slower-than-expected sales and margins pressured by incentives.
Telford also forecast continued impact on sales rates and margins in 2020.
To offset the hit, the London-focused homebuilder said it plans “even greater focus” on build to rent, with higher proportion of Londoners renting.
“We continue to view build to rent as being the future of increasing housing delivery in London,” the company said, adding that it expects build-to-rent to exceed 50 percent of its development pipeline before the end of 2019 and increase thereafter.
The company also said two build contracts were now likely to be pushed to the next fiscal year on planning issues, hitting 2019 profit by about 5 million pounds.
Telford shares were down 12.1 percent at 307.5 pence in early trading.
(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D’Silva and Shounak Dasgupta)