27th Jun 2007 07:03
Taylor Woodrow PLC27 June 2007 27 June 2007 Taylor Woodrow plcPre-close Trading Statement Taylor Woodrow plc is issuing the following pre-close trading statement prior toits half year period end on 30 June 2007 and ahead of the expected completion ofthe Company's proposed merger with George Wimpey Plc on 3 July 2007. Merger of Taylor Woodrow plc and George Wimpey Plc The merger of Taylor Woodrow plc and George Wimpey Plc is an outstandingopportunity to create the UK's largest housebuilding company. The Board ofTaylor Woodrow is delighted that shareholders of both companies have given theproposal their overwhelming support. Since the announcement of the merger on 26 March 2007, detailed integration workhas been carried out across all divisions. As a result the new management teamsand reporting structures for the combined businesses are agreed and will takeeffect immediately upon completion. UK Housing The UK housing market has remained stable during the first half of the year,with good buyer demand and customer confidence. Gross and operating margins forthe UK housing business are showing improvement over the same period in 2006. Net reservations are in line with those achieved in the equivalent period of2006. Site openings are on track to deliver the anticipated 5 per cent. increasein average sites over the year. We expect completions in the first half to besimilar to the first half of 2006. The order book at week 24 is ahead by over 10 per cent. year on year, both byvalue and volume. The owned short term landbank is similar to that of last year. Furtherinvestment to increase the landbank is scheduled for the second half of thecurrent year. North America Housing Our markets in Texas and Canada have continued to be healthy. However thehousing markets in Arizona, California and Florida have remained challenging.Buyer confidence is low due to continuing concern about interest rates and thehigh level of housing stock. Sales rates in North America overall have declined although there isconsiderable variation across our key markets. Market weakness persists inCalifornia and particularly Florida, with increased levels of sales incentivesrequired in both markets. We expect volumes in the first half of 2007 to be below the levels achieved inthe first half of 2006. Due to the pressure on pricing driven by marketconditions, we anticipate margins being significantly below last year excludingthe effect of the previously announced exceptional items. The order book at the end of week 24 is around 45 per cent. lower in sterlingvalue terms than the equivalent position in 2006. We continue to remain very selective about land acquisition in North America. Asa consequence, the landbank at the half year will be below that at the year end. Spain & Gibraltar Housing The Mallorca and Gibraltar markets continue to be stable. Markets in mainlandSpain have slowed significantly due to overcapacity and higher interest rateswhich have dampened demand from British buyers. Operating profits in the firsthalf will be significantly lower than the same period in 2006. The majorcontributory factor to this is a significant land sale in the same period lastyear. Construction The Construction business continues to perform in line with expectations.Contract wins during the first half include upgrading the Docklands LightRailway in London to accommodate longer trains. Outlook In the UK, we currently anticipate less buoyant market conditions in the secondhalf of the year, due to the impact of recent interest rate changes and theeffect of these on customer confidence. However we are confident that progresson our profit enhancement plans in the UK will continue to improve underlyingperformance. In North America short term market conditions remain difficult to predict. Thefocus of the business remains on managing costs and maintaining a steady salesrate. The Board remains confident that the continuing improvement in our UKperformance, as well as our ability to recover strongly from the difficult UStrading conditions over the next two to three years, will deliver significantvalue to our shareholders. This value will be enhanced further by the strengthof the combined Taylor Wimpey business in both key markets. -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 per cent. to £3.6bn. Taylor Woodrow announced itsproposed merger with George Wimpey Plc on 26 March 2007. For further information please visit the company's website -www.taylorwoodrow.com Enquiries 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