Wimpey focuses on increasing operating margins rather than volume in difficult UK market.
George Wimpey has increased pre-tax profit by 19% to £450.7m for the year ended 31 December 2004 despite a slowdown in the UK housing market.
Turnover increased by 4% to £3,005.7m and Morrison Homes in the US recorded a 59% increase in operating profit to £99m. The housebuilder said that the strong performance in the US compensated for the difficult market conditions in the UK.
Peter Johnson, chief executive said: “In the UK, our focus on controlling costs, selective land purchase, and opening more outlets, will support our performance in all market conditions. In the US, our strong market positions and landbank will enable us to continue achieve significant further growth.”
Wimpey said that it had responded to the business environment in the UK by maintaining tight control over costs and by being more selective in acquiring land particularly in the last quarter of 2004.
The housebuilder reported a 5% fall in total completions in the UK to 12,232, saying that it had focused on improving operating margins rather than delivering maximum volumes during 2004. Average selling price rose by 8% to £182,000 for George Wimpey homes and by 2% to £320,000 for Laing Homes.
It said that the market outlook in the UK remained uncertain, although it said that visitor levels and interest in the first seven weeks of the year had been at the stronger end of expectations. It said that pricing had remained stable and that the amount of incentives used to draw in buyers were at a lower level than last autumn.
The City responded positively to the results and shares were 26.5p up at 459p by mid-morning.