Confident Taylor Wimpey back in profit

A recent slide in house prices and consumer confidence has raised fears that the market recovery will stall, but Taylor Wimpey said it is in a stable position with lower net debt and a good order book.

The group reported pre-tax profits of 19.6m for the six months to June 30, against a loss of 68.9m in 2009, which excluded a 527m writedown in the value of land and work in progress.

Taylor Wimpey said its focus on maximising margins is the right strategy at a time of economic uncertainty and fears about possible changes to planning policy.

It added that the UK housing market had been "relatively robust", despite uncertainties stemming from the General Election.

Taylor Wimpey's chief executive Pete Redfern said: "We feel we're in pretty good shape to weather things if they're slower in the second half.

"What we're seeing on the ground is still pretty stable. But we're not ignoring the potential risks."

The group completed a total of 4,804 homes in the first half, a slight increase on a year earlier.

The average selling price rose by 9.8 per cent to 168,000, with changes in the type of properties sold helping to improve the figure.

It opened 46 new outlets during the half year, although the average number of sites reduced to 295 from 322 in the second half of 2009.

Taylor Wimpey has three new developments in Yorkshire which are scheduled to open this year.

Fairview Green in Pudsey opens in September, Crest Park in Bradford also opens in September and a third site, as yet un-named, is due to open in Wakefield in December.

Taylor Wimpey has a total of 20 sites throughout Yorkshire, including the new developments, and they cover a number of major towns and cities including Sheffield, Leeds, Wakefield, Bradford, Castlefield and Selby.

Most offer a choice of two, three, four and five bedroom homes as well as apartments.

UK house prices fell 0.6 per cent in June, the third successive monthly fall, according to mortgage lender Halifax, and further house price falls look likely into 2011.

The group has reduced its net debt to 633.9m, from 1.03bn at the same period last year.

Analysts were impressed with the company's order book of 952m in the UK, which coupled with first half sales means it has met 86 per cent of its targeted completions for the year.

In the North America business, the order book rose to 668m from 551m a year earlier. Operating profits for the region grew 51 per cent to 28.2m despite continued volatility in the United States housing market.