10th Jan 2007 07:01
Taylor Woodrow PLC10 January 2007 Taylor Woodrow plc, the international housing development company, today issuesan update on trading for the year ended 31st December 2006. Preliminary resultswill be announced on 20th February 2007. Group Overall we anticipate full year results to be at the top end of expectations,after making a provision against our North America land positions. Group Housing At a consolidated level, home completions were up 5.2% to 13,165 (2005: 12,516).The Group landbank (owned and controlled) decreased to 68,662 plots (2005:75,160), driven by a reduction in holdings in North America. The Group orderbook was also down at £1,070m (2005: £1,318m), with a decrease in North Americaoffsetting increases in the UK and Spain. UK Housing We completed 8,294 homes in the steady market conditions experienced during2006, up 1.4% on last year (2005: 8,178). Average selling prices increased by4.3% to £193k (2005: £185k), reflecting both mix changes and increases in theunderlying price per square foot. Sales rates remained good in the second half of the year, despite rises ininterest rates. An increase of 5% in active sites during the second halfcontributed to a 30% increase in the order book to £534m (2005: £411m). Aspreviously advised, margins for the full year are slightly ahead of thoseachieved in the first half. We have maintained our investment in the UK landbank, which now stands at 34,827plots (2005: 34,985), representing 4.2 years of supply. North America Housing The US Housing market weakened considerably in 2006, as rising interest ratesand growing concerns over affordability have affected confidence. However, thestrategy of maximising forward sales during 2005 will enable us to report astrong result in North America for 2006, despite the impact of anticipatedpre-tax land write-offs in the region of US$40m. These write-offs follow a fullreview of our year-end land positions and also include deposits on options nottaken up. Home completions in 2006 were 4,492, up 14.2% on last year (2005: 3,932).Average selling prices were lower at US$427k (2005: US$452k) primarily due tothe impact of our reduced exposure to luxury Florida high-rise completions in2006. Our land development business remains robust, completing 2,639 lots (2005:2,735). The overall order book for North America is down by 39.9% to US$854m. We reducedour land spend in North America during 2006, but retain a strong landbank of31,353 owned or controlled plots (2005: 37,910) equivalent to 4.4 years ofsupply. Spain and Gibraltar Housing We continue to make progress in our operations in Spain and Gibraltar, althoughdelays in obtaining habitation certificates meant home completions were down6.7% to 379 (2005: 406). Average selling prices have increased to £205k (2005:£169k) reflecting the relative strength of the market in Mallorca compared toCosta Blanca and Costa del Sol. The forward order book stood at £100m at the year end (2005: £81m) and we own orcontrol 2,482 plots up 9.6% on last year (2005: 2,265) and representing 6.5years of supply. Construction The performance of our Construction operation is in line with expectations. Gearing The year-end net debt position has been reduced below last year's level.Year-end gearing will be around 20%. Outlook The UK housing market remains good. Underlying fundamentals are strong due tothe continuing significant undersupply of new housing. However, despite strongprice appreciation at a national level, there were wide regional variations andcustomer confidence could be damaged if further interest rate rises materialisein 2007. Assuming market conditions remain stable, our strong landbank providesus with good opportunities for growth in 2007 and 2008. In North America, although the markets in Arizona, California and Florida remainchallenging and difficult to predict, current market conditions in Texas andOntario are healthy. We continue to be confident in the prospects for thebusiness in the medium-term, but expect to see significant reductions in bothoperating margin and return on capital employed during 2007. In Spain we are well-placed to benefit from any land acquisition opportunitiesthat market conditions might present. -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 2005 turnover increasedby 5% to £3.5 billion. 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 Bell PottingerBen Woodford / Dan de Belder 020 7861 3232 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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