Housebuilder George Wimpey announced strong preliminary results on Tuesday despite the current challenging housing market conditions.
The group, which includes luxury housebuilder Laing Homes and US builder Morrison Homes, as well as Wimpey Homes, achieved pretax profits of £450m, a 19% increase on 2003 figures.
Wimpey chief executive Peter Johnson said: ‘We have entered 2005 in better shape than ever before.’ Group turnover increased by 4% to £3.5bn. Operating profit increased by 16% to £500m, while earnings per share increased to 80.8p, a rise of 18% on 2003.
Wimpey’s board has also proposed a 28% increase in the final shareholder dividend to 10.8p a share. This follows a 37% increase in the interim dividend announced in July 2004. If approved, Wimpey shareholders will receive a total dividend for the year of 16p a share, 31% up on 2003.
Wimpey believes it has benefited from its twin UK and US businesses. ‘During 2004, UK business became difficult but the US market continued to strengthen,’ said a spokesman.
Despite the positive preliminary results, Wimpey’s actual completions fell from 12,909 in 2003 to 12,232 at the end of December 2004.
In uncertain market conditions, Wimpey has concentrated on improving operating margins rather than delivering increased volumes.
The average number of Wimpey schemes opened dropped to 295 from 2003 levels of 309. However, in the first seven weeks of 2005, Wimpey has reported an average of 325 opened schemes and an upswing in selling rates as the group starts to see a return on its increased land-buying programme of 2003 and early 2004.
Wimpey’s land bank increased by 5% in 2004 to 51,119 plots from 48,608 at the end of 2003. Planning permission was achieved on 15,000 plots during the year.
Alan Castle, UK economist for Lehman Brothers said: ‘There was a pick-up at the start of 2005 but it is too early to say whether this will continue.’
Wimpey will continue to focus on controlling costs in 2005 and has announced plans to save £20m.