Reservations in the first three months are running 50 per cent ahead of last year, while completed sales have risen by 15 per cent. 'The nail- biting thing is to see whether these reservations will be converted into sales,' said David Wilson, chairman and chief executive. However, the rate of conversion had not changed from the average of about 30 per cent in the previous year.
Sales in the weekend before the Budget fell 50 per cent, but have returned strongly since. About half of the sales in 1992 were at less than pounds 60,000, although this is likely to fall to 40 per cent this year. These buyers will benefit from the doubling of the stamp duty threshold to pounds 60,000, although the company had been paying stamp duty for first-time buyers.
Profits before tax last year fell 39 per cent to pounds 16.9m on sales down 6.4 per cent to pounds 127.7m. Houses sold rose slightly to 1,367 but average prices dropped pounds 5,000 to pounds 75,000. The costs of moving into new regions and expanding the landbank - which stands at 8,750 plots - also pushed margins down from 20.3 per cent in 1991 to 13.5 per cent, and 11.2 per cent in the second half. 'I hope this is the low spot,' Mr Wilson said.
Profits from the property division fell from pounds 6.7m to pounds 4.4m and Mr Wilson warned that recovery there was likely to lag a year behind the housing market. Earnings per share dropped from 24.5p to 14.6p but the final dividend was held at 6.2p for an unchanged total of 8.7p. The shares closed 3p higher at 384p.
Pre-tax profit at Tay Homes fell from pounds 1.82m to pounds 1.03m, despite a 15 per cent rise in houses sold. The group also reported an increase in sales since the start of the year but said it had had 'little effect on margins'. Earnings were 3.04p (5.5p) a share and the payout was held at 1.2p.Reuse content