In order to assess the basic economic conditions within the housing sector, it has been said that consideration should be given to the economic position of the major mass production new house builders in the UK.
These results are somewhat settled and in a better state than the last couple of years reflecting the more stable economic conditions within the sector as a whole. Levels are still low compared to four years ago, but the sector is not in a static state or in a depressed state. Things could be more appropriately defined as cautiously or quietly optimistic or positive rather than buoyant.
Figures for the year are not formally announced until March or April however a forecast is usually made in January to the City which is usually indicative of the prospects of the main players in the market.
Snapshot results for some of the main operators are as follows:
Persimmon Homes
10% increase in turnover to £1.57 billion.
Pre tax profits to be at the higher range of expectations (from £75 million to £96 million)
Increase in sales from 8,976 (2009)Â to 9,384 legal completions.
Net debt down from £267.5 million to £51 million.
Holds 59,000 plots in the land bank.
Average selling price of £167,000
Taylor Wimpey
Completed 9,962 homes in 2010 compared to 10,186 in 2009.
TW have looked to prioritise profit, efficiency and margins over volume.
Operating profit expected to be 7% up from 0.8% in 2009.
Having reduced build cost by 10% in the first half a year, in addition to further savings in the last half a year have resulted in much healthier margins.
Outlook is cautious with the volume of mortgage lending and the wider economy but is continuing to increase margins and is enhanced by prices, sales rates and margins at sites coming on stream this year.
Bovis
Build cost savings have also helped Bovis in addition to improved sales prices during the year to December 31st, resulting in increasing its gross margins.
Pretax profits are expected to be above £16.3 million expectations.
It has added around 3,700 plots to its land bank, mainly in the South of England (80%) where demand is most consistent at a cost of £203 million.
Bovis stated that it will pay a dividend in 2011. The group continues to expect subdued activity compared to historic levels but pointed out that the long term imbalance between supply and demand remained a positive factor.
Galliford Try
Galliford Try’s Housing completions rose from 663 units to 851 units over the same period in 2009.
Its average selling price on private homes rose by 4% from £197,000 to £204,000.
Total reserved housing sales increased 11% to £359 from £324 million.
It commented that despite the economic uncertainty, it was encouraged by the performance of its housebuilding business and was confident in its strategy to deliver its expansion plan.
Bellway plc
The markets have a positive outlook on the company, Britains 4th largest housebuilder. Increased lending facility to buy additional land confirms positive approach. As does the share price which has changed by increasing 30% from the 01st December 2010 to 16th January 2011.
19th January 2011