Housebuilder warns that first half profits will be "well down" on the same period in 2004.
Housebuilder Wimpey issued a downbeat trading statement today, warning that first half profits will be “well down” on the same period in 2004.
In the trading statement, Wimpey said that the housing market recovery early this year was “short-lived”, and since February had been steady at a level lower than 2004.
In the first six months of the year, Wimpey’s sales rates were 17.5% down on the same period in 2004. Total house completions are also 10% lower.
The need to offer incentives to sustain sales has meant that gross margins are 2.5% down on the first half of 2004, with operating margins also expected to fall. The bad news continued with the 2005 total order book 7% lower in volume and 12% lower by value than the same time last year. Average debt is expected to be higher when the first half results are announced.
The US division provided better news, with first half completions up 16% on last year.