Wimpey predicts record profits

Wimpey is expecting record profits for 2004 despite a fall in sales volumes. The housebuilder blamed five interest rate rises and negative media coverage for a slowdown in the housing market since the summer.

Wimpey said that the autumn period had seen only a modest improvement in the market, and as a result it had used incentives in the second half of the year to increase the sellling rate.

The company said that the UK order book of £540m for 2004 would be 15% lower than last year for George Wimpey developments and 33% lower for subsidiary Laing Homes.

Average selling prices for the second half of the year would be similar to the first half, which represented an increase of around 9% on 2003. Operating margins for Wimpey and Laing Homes will show an improvement on 2003

Wimpey said that it had taken a very selective approach to buying land in the last months of the year, although the 50,000 plots expected to be held at year end is similar to the half year total.

Despite the fall in sales volume Wimpey said that the housing market would continue to be supported by low unemployment, an undersupply of homes and historically low interest rates. It also said that labour costs had moderated during the year.