UK housebuilder unveils profit boost

Housebuilder Taylor Wimpey today said it returned to profit over the first six months of this year, despite selling fewer houses in the period.

The group, which also trades as George Wimpey and Bryant Homes, has benefited from the tight control of costs and more efficient building practices, even though its average selling price has remained at £168,000 and it sold 4,707 houses against 4,804 a year earlier.

Chief executive Pete Redfern said consumer confidence in the housing market was good despite the economic conditions, but problems getting a mortgage were holding back potential buyers. Trading in July was better than expected as the company gears up for its key selling season over the autumn.

Profits in the half-year to June were £28.9m against a loss of £2.3m, on revenues 3% lower at £817.8m. The figures exclude the North American businesses, which were sold last month for £730m.

That sale has helped cut borrowings to £160m compared with £2bn three years ago, but he says the group will be cautious with its spending plans.

Ruling out acquisitions, he said now was not the time for “big bets”, but he added the group will continue to add to its landbank if good opportunities arise.

The group currently has one of the largest landbanks in the industry with 142,000 plots of which 64,000 have planning permission.

Orders at the end of July were worth £989m, just below last year’s equivalent figure.

Spain remains a problem, with a loss of £1.1m in the six months as the number of houses sold dropped from 83 to 30, though Taylor says it remains committed to the market for the long-term.

The group did not pay an interim dividend but will review this position at the end of the year depending on how much it is spending on land.