Taylor Woodrow PLC
27 June 2007
27 June 2007
Taylor Woodrow plc
Pre-close Trading Statement
Taylor Woodrow plc is issuing the following pre-close trading statement prior to
its half year period end on 30 June 2007 and ahead of the expected completion of
the Company's proposed merger with George Wimpey Plc on 3 July 2007.
Merger of Taylor Woodrow plc and George Wimpey Plc
The merger of Taylor Woodrow plc and George Wimpey Plc is an outstanding
opportunity to create the UK's largest housebuilding company. The Board of
Taylor Woodrow is delighted that shareholders of both companies have given the
proposal their overwhelming support.
Since the announcement of the merger on 26 March 2007, detailed integration work
has been carried out across all divisions. As a result the new management teams
and reporting structures for the combined businesses are agreed and will take
effect immediately upon completion.
The UK housing market has remained stable during the first half of the year,
with good buyer demand and customer confidence. Gross and operating margins for
the UK housing business are showing improvement over the same period in 2006.
Net reservations are in line with those achieved in the equivalent period of
2006. Site openings are on track to deliver the anticipated 5 per cent. increase
in average sites over the year. We expect completions in the first half to be
similar to the first half of 2006.
The order book at week 24 is ahead by over 10 per cent. year on year, both by
value and volume.
The owned short term landbank is similar to that of last year. Further
investment to increase the landbank is scheduled for the second half of the
North America Housing
Our markets in Texas and Canada have continued to be healthy. However the
housing markets in Arizona, California and Florida have remained challenging.
Buyer confidence is low due to continuing concern about interest rates and the
high level of housing stock.
Sales rates in North America overall have declined although there is
considerable variation across our key markets. Market weakness persists in
California and particularly Florida, with increased levels of sales incentives
required in both markets.
We expect volumes in the first half of 2007 to be below the levels achieved in
the first half of 2006. Due to the pressure on pricing driven by market
conditions, we anticipate margins being significantly below last year excluding
the effect of the previously announced exceptional items.
The order book at the end of week 24 is around 45 per cent. lower in sterling
value terms than the equivalent position in 2006.
We continue to remain very selective about land acquisition in North America. As
a consequence, the landbank at the half year will be below that at the year end.
Spain & Gibraltar Housing
The Mallorca and Gibraltar markets continue to be stable. Markets in mainland
Spain have slowed significantly due to overcapacity and higher interest rates
which have dampened demand from British buyers. Operating profits in the first
half will be significantly lower than the same period in 2006. The major
contributory factor to this is a significant land sale in the same period last
The Construction business continues to perform in line with expectations.
Contract wins during the first half include upgrading the Docklands Light
Railway in London to accommodate longer trains.
In the UK, we currently anticipate less buoyant market conditions in the second
half of the year, due to the impact of recent interest rate changes and the
effect of these on customer confidence. However we are confident that progress
on our profit enhancement plans in the UK will continue to improve underlying
In North America short term market conditions remain difficult to predict. The
focus of the business remains on managing costs and maintaining a steady sales
The Board remains confident that the continuing improvement in our UK
performance, as well as our ability to recover strongly from the difficult US
trading conditions over the next two to three years, will deliver significant
value to our shareholders. This value will be enhanced further by the strength
of the combined Taylor Wimpey business in both key markets.
Notes to editors:
Taylor Woodrow is a housing development group. Its primary business is the
development of sustainable communities of high quality homes across the UK and
in selected markets in North America and Spain. The company is listed on the
London Stock Exchange and in the year ending 31 December 2006 consolidated
revenue increased by 3 per cent. to #3.6bn. Taylor Woodrow announced its
proposed merger with George Wimpey Plc on 26 March 2007.
For further information please visit the company's website -
Jonathan Drake (Investor Relations) 0121 600 8394 / 07816 517 039
Ian Morris (Media Enquiries) 0121 600 8520 / 07816 518 767
James Murgatroyd / Clare Strange 020 7251 3801
This information is provided by RNS
The company news service from the London Stock Exchange