INL:DNA (interim results)

Deoxyribonucleic acid is a thread-like chain of nucleotides carrying the genetic instructions used in growth and development. In essence, it stores bio information and the DNA backbone is resistant to cleavage. Inland and its organic make-up are of the terrestrial and what occupies it: identify; separate; build; and vend. The company also possesses great connexion and continuity of purpose.

• Make-up: DNA was first isolated by Friedrich Miescher in 1869, with Inland’s sequester in 2005 and IPO morphing in 2007. The chain of nucleotides, however, runs back much further to Country & Metropolitan plc (C&M), which was founded in 1990 by Stephen Wicks, CEO of Inland. C&M was sold to Gladedale in 2005 for £72m (C&M’s float price was £6.9m). Do the math.
• Core 1: A brownfield regeneration specialist in the UK gene pool, which means it finds land, procures it, wins reproductive planning and sells it ‘scientifically ready’ to housebuilders/developers. This saves the latter significant laboratory time and reduces the capital lock-up experiment (popular mechanics).
• Core 2: Like DNA, Inland also possesses four master developer nucleobases, meaning that not only is it a land experimenter and improver but it also builds houses in its own right, works as a residential contractor and develops commercial premises. Its Board also uniquely holds 13% of Inland’s shares.
• Interim results: On 28 March, another empirical milestone was passed with Inland’s half-year results for the period ended 31 December 2017. These were tidily structured results. Revenue rose four-fifths to £61m, with underlying EBIT doubling – and margins clearing 10%. In turn, Pre-tax profit rose 8% to £5.4m, underlying EPS added 18% and the dividend was raised 30%. NAV per share increased 14% and adjusted EPRA by a further 6% to 97.63p.
• Due to the nature of its business, the company employs EPRA net asset value which reflects the undiscovered value in its land. Today, however, Inland is trading at a 35% discount to that value, whereas its nearest peer, Urban & Civic, is at a 4% premium. Note, too, that the value of the UK Housebuilding Sector (+43% in 2017) is off 12% year to date; and Inland is one of only three (from 17) to be higher; the other two are Springfield and Abbey.
• Investment summary: The company is unique in structure and its biological make-up is diverse from the more conventionally structured UK housebuilders. The unique material properties of DNA have made it an attractive molecule for material scientists and engineers interested in micro and nano-fabrication. Inland investors can do the same; and do so at a discount of some 40%.