Taylor Woodrow buys Heron sites

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The Independent Online
TAYLOR Woodrow, the property and construction company, is expanding its UK house-building operations with the acquisition of the housing division of Gerald Ronson's Heron Corporation, writes Tom Stevenson.

The pounds 30.8m acquisition brings 1,100 plots and 200 houses under construction. It will add about 300 houses a year to Taywood Homes' annual completions of 800.

Tony Palmer, chief executive, described the Heron sites as 'a high-quality portfolio in locations which are an excellent fit with our current Taywood Homes business'. The deal increases the land bank by about 50 per cent.

Analysts said the plots were being acquired at 22 per cent of Heron Homes' average selling price of pounds 81,000. That was cheaper than the 24 per cent at which Taylor Woodrow was buying land in the open market.

The disposal was in line with the business plan agreed at the time of Heron's debt restructuring last year. For Taylor Woodrow it continues a policy of increasing the UK content of worldwide housing sales.

The Heron operations are expected to add about pounds 2.5m to pre-tax profits, which are forecast to have reached pounds 25m last year, rising to pounds 36m in 1994.

In 1992, losses soared to pounds 66m after write-downs. The dividend was cut from 9.5p to 1p.