Taylor Wimpey UK profit up 56pc as firm deals with debt
Taylor Wimpey cut its debt pile by 82 per cent and saw UK profits increase by 56 per cent in 2011.
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The UK’s biggest house builder by volume reported £89.9m group pre tax profit (excluding exceptional items) for the year ended 31 December, up from a £27.9m loss in 2010. Revenue was up 2.3 per cent, from £1.76bn to £1.8bn. The group is reintroducing a dividend to shareholders, of 0.38p.
It came after the sale of its North American business in its “final stage of restructuring”. Net debt was reducded from £664m in 2010 to £116m.
UK operating margin was 9.7 per cent, up from 6.4 per cent the year before. UK revenue increased 2.5 per cent to £1.78bn, with operating profit up from £111m to £173.2m. Completions in the UK rose 2.2 per cent to 10,180 (from 9,962), with average selling prices at £171k.
The firm has 65,264 plots, or 6.4 years of land in its UK portfolio. It said current land strategy remains weighted towards both the south (63% of owned and controlled short term land portfolio plots) and houses (81% of owned and controlled short term land portfolio plots).
It has also added added 12,868 new potential plots to the strategic land portfolio, which does not have planning consent.
Chief executive Pete Redfern - who announced a soft volume cap of 14,000 units at the end of last year after “learning lessons” from the housing crash - said: “Our performance is the result of a continued focus on driving value by prioritising a further improvement in margins and return on capital.
“In 2011, we saw significant progress in our operational performance and I am pleased that we have reached our double digit operating margin target ahead of schedule.
“While wider economic conditions remain uncertain, the UK has seen a period of continued stability in the underlying housing market and strong growth across a number of areas as shown by our order book.
“We feel well-positioned to deliver further improvement through our value-driven strategy.”
The order book is up 17 per cent to £835m. Looking ahead, the firm said: “In the UK, while it remains too early to judge the market for the year as a whole, the early weeks of trading in 2012 have followed the encouraging patterns of the second half of 2011, with good visitor levels, healthy reservations and low cancellations.”