Taylor Woodrow reports encouraging start to 2005

Taylor Woodrow has announced a 27% increase in pre-tax profit for 2004 amid signs of an upturn in the UK housing market.

The housebuilder said that pre-tax profit rose to £427.1m for the year ended 31 December and that UK housing completions increased by 18% to 9,053 units. In also said that reservations and sales of homes had increased in the first few weeks of 2005.

Chief executive Iain Napier said: “Sales rates and visitor levels have been ahead of the last six months of 2004 and indeed total net reservations for the first seven weeks are slightly ahead of the same period last year.”

Despite the encouraging start to the year the company said it was too early to predict the 2005 market and said it would continue to focus on prudent land buying, cost control and efficient use of capital.

The firm said that UK housing completions increased by 18% to 9,053 homes while average sales price increased by 9% to £197,300. At the end of the year the UK housing business had a forward order book of £407m.

Taylor Woodrow said that cost savings of £13.5m were achieved in 2004 from the integration of housebuilder Wilson Connolly, and it said these would rise to £25 million in 2005.

Repeat work from blue chip customers, and a strong showing in the healthcare PFI and facilities management sectors helped Taylor Woodrow’s construction arm to increase profit to £34.6m up from £19.4m.

The company also said that its US housebuilding arm had a strong year with operating profit rising 42% to £127.6m and total completions increasing 30 per cent to 3,635.

Napier said: “Overall our balance of profit generation between the UK, North America and Spain provides us with alternative growth channels and the ability to mitigate exposure to any one market.”

Taylor Woodrow said that in the medium term the UK housing market remained very attractive and was supported by a shortage of supply, low interest rates and good economic conditions.