2nd May 2007 07:02
Taylor Woodrow PLC02 May 2007 AGM Statement Ian Smith, Chief Executive of Taylor Woodrow, will make the following comments regarding current trading at today's AGM: "In the UK, market conditions remain robust and our business reflects this. Wehave achieved a slightly higher number of reservations in the year to datecompared to the equivalent period of 2006, along with a reduction incancellation rates. Site openings are on track to deliver the anticipated 5 percent increase in average sites and we remain confident in the prospects for thefull year. However, in line with our comments at the year end, we expect profittiming in 2007 to be weighted to the second half. Sales rates in North America overall are running at a higher level than in thesecond half of 2006, although prices remain weak and market conditions continueto vary considerably across our key markets. Conditions remain good in ourmarkets in Texas and Canada and the Arizona market is stabilising. However,market weakness persists in California and particularly Florida and conditionshave worsened in certain submarkets within those states. The Spring selling season for our high-rise tower division in Florida has beenvery poor. While the locations of our sites are excellent the high-rise markethas weakened significantly and we have therefore taken the decision to savecosts by suspending sales efforts for this business until market conditionsimprove. This decision will result in a one-off non-cash provision of £15.5million relating to our land holdings in this sector. In addition, we intend totake a further £9.5 million provision to reflect weakness in certain localmarkets in Southern California and Florida. We remain cautious in the land market across North America and have reduced ourlevel of spend compared to last year. However, we are ready to take advantage ofopportunistic deals as they might emerge later in the year and continue to beconfident in the prospects for the business in the medium-term. As disclosed in our 2006 Report and Accounts, a jury trial in Florida awardeddamages against several US-based Taylor Woodrow subsidiaries totalling £22.7million in November 2006. On 4 April 2007, the judge ruled on post-trial motionsfiled by Taylor Woodrow and reduced the award to £13.9 million. We will bepursuing an appeal, but have provided £16.6 million this year against thepotential liability including associated costs. Spain and Construction continue to trade in line with expectations. Overall, the strength of our performance in the UK is substantially offsettingthe impact of ongoing market weakness in North America and, excluding theexceptional items in North America, the outlook for 2007 remains in line withour expectations." Norman Askew, Chairman of Taylor Woodrow, will make the following commentsregarding the proposed merger with George Wimpey Plc at today's AGM: "The proposed merger of Taylor Woodrow plc and George Wimpey Plc to form TaylorWimpey plc announced on 26 March 2007 continues to progress extremely well andaccording to plan. The Board believes that the merger has compelling strategic and financial logicfor both companies. The merger will create a combined business withsignificantly enhanced prospects in both the UK and the US. The Taylor WimpeyGroup will be the leading UK house builder in terms of completions, will have acombined UK landbank of over 92,000 plots, and will be strengthened in the USthrough the combination of highly complementary operations across some of themost attractive US markets. In addition, shareholders will also benefit fromenhanced profitability through the delivery of significant cost savings andacceleration of both companies' margin improvement plans. Documents to shareholders are expected to be posted on Friday, 4 May 2007 andthe merger is expected to complete as scheduled around the beginning of July." A conference call for analysts and investors will be held at 09:00 today.The dial in number is +44 (0) 1452 562 717 and the conference ID number is7976765. -ends- Notes to editors: Taylor Woodrow is a housing development group. Its primary business is thedevelopment of sustainable communities of high quality homes across the UK andin selected markets in North America and Spain. The company is listed on theLondon Stock Exchange and in the year ending 31 December 2006 consolidatedrevenue increased by 3% to £3.6bn. Taylor Woodrow announced its proposed mergerwith George Wimpey Plc on 26 March 2007. For further information please visit the company's website - www.taylorwoodrow.com For further information please contact: Taylor WoodrowJonathan Drake (Investor Relations) 0121 600 8394 / 07816 517 039Ian Morris (Media Enquiries) 0121 600 8520 / 07816 518 767 FinsburyJames Murgatroyd / Clare Strange 020 7251 3801 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Taylor Wimpey