Housebuilder will meet forecasts for 2007 but reveals 20% fall in value of orders
Taylor Wimpey has announced it expects to meet financial expectations for 2007 in spite of a downturn during the second half of the year.
In a trading update, the UK’s largest housebuilder says it will weather fallout from the “decreased buyer confidence” of the last six months, but warns of difficult times ahead.
The firm, which was formed from a merger of Taylor Woodrow and George Wimpey in July last year, says operating margins rose to 14% in 2007 from a combined margin of 12.5% the year before.
Following the merger, the firm’s landbank has risen – as of the end of 2007, Taylor Wimpey had detailed planning for 42,460 owned plots, up from a combined tally of 41,866 plots in 2006.
However, it completed fewer homes, down from 21,920 in 2006 to 20,645 last year, and saw a significant downturn on its order book, with the value falling from £1.316bn at the end of 2006 to £1.064bn at the close of last year.
Pre-tax profits are expected to fall in Taylor Wimpey’s construction division, which the firm blames on poor performance on a number of overseas road construction projects.
Media reports that the construction division could be sold off have been denied by Taylor Wimpey chief executive Pete Redfern, and the trading update makes no mention of a mooted sale.
The update says 2008 is likely to see increased “savings and efficiencies” in the light of current market conditions, and predicts a “subdued start” to the Spring selling season.
It says: “Relative margin improvement… will remain a priority over volume.”