House builder Taylor Wimpey said it has seen an improvement across the business in the last six months as it focuses on margin growth and as trading conditions in the housing market stabilise.
Profit before tax and exceptional items surged to £78.2m in the half year ended 1 July 2012 from £28.9m the year despite uncertain wider economic conditions. Revenue for the period climbed to £906.2m from £817.8m.
Group operating margin increased to 11.1% from 8.2% in 2011 and total return on net operating assets increased to 11.6% from 7.2% in the same half a year before.
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Increased average selling price of £176,000 compared to £168,000 the year before. The group also logged an 18% increase in the value of the private order book to £688m.
Taylor Wimpey said that UK market conditions remain stable, with underlying pricing unchanged over the course of the first half of 2012.
Chief executive Pete Redfern noted: "Although wider economic conditions remain uncertain, we have been reassured by the continued stability in trading conditions and the strength of our order book. Looking ahead, we expect to deliver further improvements in performance across all key metrics."
"Mortgage lending continues to be constrained, although we have been encouraged by the introduction of a number of higher loan to value products since the start of the year, most notably under the NewBuy scheme."
Assuming that current stable markets persist, the group expects to continue to achieve improved performance period on period and to deliver full year returns in 2012 that are in line with company expectations.
Meanwhile the market in Spain remains challenging with Spanish buyers particularly hit by restricted mortgage availability and an ongoing lack of confidence in the economy.
Group net debt fell to £135.2m at 1 July 2012 from £165.9m at 3 July 2011, as a result of the profitability in the period.
An interim dividend of 0.19p per share has been declared which has been calculated with reference to the net asset value of the group and is expected to represent around one-third of the total dividend for the year.
CJ
