POSITIVE: Chief executive Pete Redfern said further performance improvements were expected.
PROFITS at Taylor Wimpey more than doubled in the first half of the year on the back of more house completions and higher prices.
The company saw revenue in the six months to July 1 rise 11.6% to £903.3 million with profit before tax and exceptional items up 171% from £28.9m to £78.2m.
The housebuilder received a further boost following the favourable resolution of a potential tax liability, which led to a one-off tax credit of £59.6m and a related interest credit of £22.4m.
Completions increased 8% from 4,707 to 5,803 with the average selling price rising 4.8% from £168,000 to £176,000.
The recovery in trading performance was highlighted in its UK operating margin, which increased to 11.4% from 8.4% a year earlier.
After almost collapsing in 2009 due to its debt, the company has overhauled its finances which included selling its North American division for more than £730m last summer.
Like other builders it has tried to buy land at cheap prices and target stronger-performing parts areas including London and south east of England.
During the first half of 2012 the purchase of 6,890 plots of land across 53 sites were approved and planning consents approved for 1,565 plots. Its net debt was down more than £30m and now stands at £135.2m.
Taylor Wimpey, which employs 210 people across more than 30 sites in Scotland, said trading in recent weeks had been stable.
While it welcomed the Treasury and Bank of England’s Funding for Lending scheme it said it was too early to know whether it would improve mortgage availability.
Mortgage availability remains “constrained” although the NewBuy scheme was helping more first-time buyers into the market.
Chief executive Pete Redfern said: “We’ve seen improvements across the business driven by our continued focus on prioritising margin growth and return on capital. Although wider economic conditions remain uncertain, we have been reassured by the continued stability in trading conditions and the strength of our order book.
"Looking ahead, we expect to deliver further improvements in performance across all key metrics."
The pension deficit widened from £234.8m to £299.4m as a consequence of “fiscal measures taken to reinvigorate the economy” and Taylor Wimpey expects it to narrow in the short to medium term.
Peel Hunt analyst Robin Hardy said the results were strong and could spark a rally in the company’s share price, but house builders remained vulnerable because demand was heavily skewed by the London housing market.
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