Wimpey upbeat after building profits

British housebuilder George Wimpey soothed nerves over the impact of higher interest rates today as it unveiled a 29% rise in half-year profits to £158.5m (€239m).

Looking ahead, the company expects more “modest” levels of house price inflation than previously experienced but still said results for the year would be at the top end of market forecasts.

Wimpey’s confidence has been helped by the completion of a three-year drive to boost operating margins and improve the performance of US arm Morrison.

All three housebuilding divisions reported strong half-year profits growth with recent acquisition Laing Homes showing the best improvement – up 43% to £17.1m (€25.8m). George Wimpey profits rose 22% to £138.7m (€209m) while Morrison Homes was ahead 33% to $60.1m (€49.7m).

The businesses also boast strong order books with 80% of projected 2004 sales already reserved or completed in the UK with 90% in the United States.

Previous efficiency efforts resulted in an operating margin of 17.1% at George Wimpey, while there was still “some room for improvement” at Laing Homes despite an increase to 12% from 10.6% a year earlier.

Total completions at Laing were up 67% at 533 in the six month period, although action to reduce the exposure of the business to the £500,000-plus (€750,000) market meant its average selling price fell 7% to £308,000 (€464,000).

At George Wimpey, total completions were up 4% at 4,560 while average selling prices rose 13% to £184,000 (€277,000).