The results of Persimmon and Taylor Wimpey, two of the UK’s largest housebuilders, came in on target this week, but were more notable for what they didn’t say than what they did
Taylor Wimpey reported a pre-tax loss of £640m for 2009, after taking a £604m writedown on land values in the first half of last year. It managed to make an operating profit of £43.3m on turnover of £2.6bn, down a quarter from last year, and to half debt from £1.53bn to £750m.
Meanwhile, Persimmon said it had made a better-than-expected underlying pre-tax profit of £7m, which was 94% down on the last year’s figure. Turnover was down 19% to £1.42bn. However, it did unveil a £74.8m writeback of the value of its land, bringing its full year pre-tax profit to £77.8m.
So what was not said? Well, despite concluding £260m of sales in the past eight weeks (8% higher than last year), Persimmon didn’t give any idea of how strong it thought this year’s recovery would be. Finance director Mike Killoran said a large number of unknown quantities, including an election campaign getting in the way of the Easter selling season, and the likely withdrawal of state aid to the banks, made it impossible to be certain the market would recover at all.
Meanwhile, Peter Redfern, Taylor Wimpey’s chief executive, said he was “cautious” about giving any guidance as to the rest of the year. In addition, Redrow’s Steve Morgan, while reporting interim results last week that showed revenue up 25%, said uncertainty in the planning system was limiting his ability to introduce the firm’s new product range.
Another straw in the wind was last week’s data from the business and enterprise department that showed that house sales in January were at their lowest levels since February 2009, and Nationwide’s reporting of the first fall in house prices for 10 months.
Elsewhere, Carillion’s results for last year showed pre-tax profit up 27% to £148m on £5.4bn turnover.