… but housebuilder warns that forward orders are down 21%, and Hometrack survey reports house price falls
Westbury this week followed other housebuilders in posting record results – and in warning that the months ahead will be tough for the market.
Despite a hike of more than 20% in profit, Westbury’s forward orders have dropped 21% compared with the same period last year, according to analysts.
The half-year results were announced on Tuesday, the same day that research group Hometrack said house prices fell for a fourth month in a row in October.
Westbury’s pre-tax profit rose 21% to £62m for the six months to 31 August 2004. It sold 2087 homes, 56 more than the same period last year, at an average of £192,150.
However, chairman Geoffrey Maddrell warned: “In the short-term, consumer confidence, which is influenced by wider economic and social factors, could inhibit demand.”
Wesbury’s Space4 business, formed three-and-a-half years ago, broke even in the first half after selling 932 units to Westbury and 143 to other customers. It was the first time that Space4 did not make a loss.
Shares in the housing sector overall were up after Westbury’s results on Tuesday, reflecting relief that they were in line with expectation, despite recent negative trading statements from Wimpey and Taylor Woodrow.
Westbury’s shares rose 14p to 383.25p on Tuesday afternoon.
Director Colin Cole was upbeat about prospects for the housing market. “Customers are taking longer but generally people think that interest rates have peaked or are least close to it,” he said.
Cole predicted that Westbury’s homes would increase in price by 3-4% in the next 12 months across the UK.
Westbury recommended an interim dividend of 5.35p a share, up 20%, and said that the company expected to provide double-digit dividend growth in the long term.
Hometrack’s October survey was less positive. It said house prices fell “practically everywhere”, and nationally prices dropped 0.6% in October. The worst affected areas were Avon, which dropped by 1.6% and north London, which fell 1.5%.
John Wriglesworth, Hometrack’s housing economist, said: “House prices will not plummet into an abyss as some are predicting.”
He added that house prices would not grow at all in 2005.