Thursday, 2 August 2012 10:48 AM
Britain’s biggest housebuilder has almost trebled its profits despite the weak housing market.
Taylor Wimpey reported a pre-tax profit of £78.2m in the first half of 2012 compared with £28.9m in the same period of 2011. Revenue increased 10.8 per cent to £906.2m.
The firm’s completions of new homes increased only 13 per cent to 5,083 while its average selling price increased 4.5 per cent to £176,000.
However, its margins increased from 8.4 per cent to 11.4 per cent as it was building on land that it bought cheaply following the credit crunch and housing market crash.
The firm bought 6,890 plots for new homes in the period compared to 5,269 in the first half of 2011.
Pete Redfern, chief executive, told the Daily Telegraph: "I am very pleased to report another period of strong financial and operating performance. We've seen improvements across the business driven by our continued focus on prioritising margin growth and return on capital."
Looking to the future, Taylor Wimpey has high hopes for the government’s NewBuy scheme, under which housebuilders and the government guarantee part of the price of a new home so that lenders can offer 95 per cent mortgages.
It said 201 homes were reserved under the scheme in the three months to June, about a third of the total across the country.
And it is also continuing to sell homes under the government’s FirstBuy scheme, with 173 completions in 2011 and enough funding for another 750.
The firm also welcomed the Bank of England’s Funding for Lending initiative, which started yesterday and should boost mortgage lending.
Pete Redfern said: "Although wider economic conditions remain uncertain, we have been reassured by the continued stability in trading conditions and the strength of our order book."