Tay lifts dividend despite profit fall

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The Independent Online
TAY HOMES, the Leeds-based house builder specialising in low-cost homes, raised its dividend 10 per cent despite a 26 per cent fall in profits in the year to 30 June.

Although there was pressure on margins, the company continued its drive for volume growth, selling more than 1,000 homes for the first time.

However, Tay has struggled to sell homes in the current year and the chairman, Trevor Spencer, called for a cut of three percentage points in interest rates to get the housing market moving.

Pre-tax profits of pounds 6.1m (pounds 8.26m) were made on turnover up to pounds 76.2m from pounds 70.6m. About pounds 1.4m of the pre-tax figure came from land sales, compared with pounds 2.3m last time. The average price of a Tay home fell almost pounds 10,000 to pounds 64,900. The company sold 1,095 properties, 245 more than last time. Total sales for this year could be up by another 100 homes unless there is a radical change in the market, Mr Spencer said.

Tay's operations in the North and Midlands were the best performers, but sales fell in Scotland. The company is building 130 houses as part of an urban renewal project in Wigan, Greater Manchester. Tay has a land bank of 4,800 units, of which 800 are for sale.

Gearing has been cut to 47 per cent from 66 per cent, but Tay has a liability of pounds 16m in deferred land payments, which would push gearing up to about 99 per cent.

Net assets per share were 138p (128p). A final dividend of 4.65p makes 5.85p for the year (5.3p), and is covered more than three times. The shares rose 3p, but fell back to where they started at 141p.