Pre-tax profit was up only 6% to £51m for the six months to 30 June; however, Egerton said: “We will be well ahead of 6% come the year end,” he said. “It is simply a matter of timing.”
Profit before tax in the housing division increased 14% to £28.5m, accounting for more than half of total profit. Egerton said the group’s star performer had been its US housing business, which increased profit 58% to £19m thanks to well-timed land investments in Florida and a strong Californian market.
In the UK, Taywood homes took advantage of the bullish housing market in London and the South-east to improve its operating margin from 9.1% to 11%. Egerton admitted that this was still below the industry average but said he wanted to get closer to his competitors’ levels by developing a stronger strategic landbank and laying down targets of 400 homes a year for each sales region.
Average selling price went up from £104 000 to £109 000. Egerton said the figure would be closer to £117 000 at the year end.
Egerton emphasised that he had no plans to sell the construction division even though profit stayed flat at £3.1m. “Construction has brought us enormous benefits by working closely with our property division,” he said. Pre-tax profit in property was up from £12m to £13m.
Greenham Trading, the company’s distribution business, saw pre-tax profit drop from £4.2m to £3.4m but Egerton said that since completing a six-month review he had decided to retain the business.