Wimpey soars despite drop in sales

BRITAIN'S largest housebuilder George Wimpey sold a quarter fewer new homes in Britain this year than last but the British market is just returning to more normal and sustainable levels.

Despite suffering a 24% drop in British completions for the six months to the end of June Wimpey, led by Peter Johnson, still managed to turn in a staggering 42% leap in group pre-tax profits to £122.7m, on turnover of £1.6bn, up 4% and exceeding analysts' expectations by more than £10m.

Much of this success was down to a significant increase in operating margins, up to 16.5% for the first half from 11.4% a year ago and the benefit of a first-time full contribution from John Laing, bought for £297m last November. In addition the average selling price of a new Wimpey home rose 16% to £163,000. Group profits were also boosted by a 64% jump in operating profits at Wimpey's US business, Morrison Homes, to $45m (£28m).

The dividend is lifted 19% to 3.8p, again above market expectations, part of a new strategy aimed at 'enhancing dividend growth rate'.

Average overall visitor numbers to show homes in the half year were at similar levels to 2002, although extra numbers in the North balanced out a slight decrease in the South. Sales rates per Wimpey outlet during the early months of 2003 were 'below those experienced in the strong market in 2002'.