# Inland Homes plc …….in land we trust

- Link: https://www.directorstalkinterviews.com/inland-homes-plc-land-trust/412739629
- Published: 2017-11-09T15:05:34+00:00
- Author: Giles Arbor

[⌊Hardman & Co Report Report Downloads⌉⌊Hardman & Co Report Report Downloads⌉[‘In God we
trust’ is the official motto of the United States of America, second only perhaps
to real estate (in a politically correct World). This latter dictum derives from
the belief that they are not making any more land – the industry’s core raw material.
Inland Homes, however, makes its own by being adept and nimble in finding sites 
and bringing them through planning. It is a hidden gem.

**Inland Homes plc (LON:INL)**

**Strategy:** The Company is a UK brownfield regeneration specialist which means
it finds land, achieves planning permission and sells it ‘oven ready’ to housebuilders
and mixed use developers (and it can also be master developer in its own right).
Inland’s gathering emergence, too, is timely given that the majority of listed UK
housebuilders are humming the ‘capital light’ mantra.

**Ethos and track record:** Its current portfolio consists of 6,936 plots with the
vast majority in the south and south east of England. In addition, strategic land
has the potential for some 2,270 residential plots across 408 acres typically on
a two to five year time horizon. Plus, Inland is building 427 houses in its own 
right.

**Valuation:** Due to the nature of its business, the Company employs EPRA net asset
value as its prime metric i.e. this reflects the unrealised value in its land. Right
now, though, Inland is trading on a 39% discount to that value whereas its nearest
equivalents Urban & Civic and St Modwen are at 9 and 19% respectively.

**Risks:** The UK economy is a little like a tardy Goldilocks: not too hot; but 
perhaps the wrong side of lukewarm. However, even the most pessimistic forecasts
are at 1% or better for GDP growth per annum in 2017 through 2019. Similarly, the
25 basis point rise in interest rates on 2 November was already built in to our 
shared prognostications. Note, too, that the UK Housebuilding Sector dipped just
0.24% on the interest rate news and remains 43% ahead in the year to date.

**Investment summary:** Inland Homes plc is complicated, unconventional and moves
to a different metric beat than a regular housebuilder; it is not one of these, 
but it can be when it wants to be. The real alchemy, though, comes in finding land
and bringing it through planning. Here, it reaps handsome rewards and the share 
price will notice; it is simply a matter of time. Inland we trust.

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