UPDATE 2-Telford Homes H1 profit up, scraps dividend

* H1 pretax profit of 0.3 mln stg

* Fails to secure significant pre-sales in H1

* Future margins to be lower than expected

* Company scraps interim dividend

(Adds detail, background)

By Rhys Jones

LONDON, Dec 2 (Reuters) - British residential property developer Telford Homes (TELF.L) swung to a half-year pretax profit on Tuesday but scrapped the interim dividend and said trading conditions were the toughest it had ever faced.

The company, which specialises in regeneration projects and affordable homes in East London, posted pretax profit of 0.3 million pounds ($445,300) for the six months to Sept. 30 compared to a loss of 3.5 million pounds in the same period last year. The group's revenues more than trebled to 35.5 million pounds.

Telford suffered a 1.4 million pounds writedown on the value of land during the period and said it cannot rule out the possibility of additional writedowns being required in the future.

In a sign of the increasing pressure that falling house prices and the soaring cost of debt are placing on housebuilders, the company said it would not be paying an interim dividend after handing out 4.5 pence per share this time last year.

"The deteriorating economic situation has led to a collapse in confidence in off plan purchases so the company is unable, at present, to secure any significant speculative pre-sales," Chief Executive Andrew Wiseman said in a statement.

Telford said its gross margin for the period was 14.5 percent but that it expects future margins to be lower than previously forecast as a result of market conditions due to falling house prices.

However, the company said its partnerships with registered social landlords and Britain's Housing Corporation as well as forthcoming projects for the 2012 Olympic games in London would help insulate it from the current economic climate.

"East London is still in a period of significant regeneration and, with the Olympic works progressing as we move towards 2012, the company is well placed as and when the housing market and economy begin to recover," said Wiseman.

The company, which received a corporation tax repayment of 3.7 million pounds during the period, said it would not invest in new land or in construction work unless future revenue was secured by contracts exchanged or significant stage payments were received on the homes within a development. ($1=.6737 pounds) (Editing by Mike Nesbit)