Wimpey reverses three-year downturn

George Wimpey, Britain's second- biggest housebuilder, returned to the black in the year to December, benefiting from a 41 per cent increase in house sales and a reduction in costs in construction and minerals.

Joe Dwyer, chief executive, said: 'We have emerged from three years of punishing recession operationally fit and financially strong.'

But he warned that contracting margins would remain low while there were too many companies chasing too little business and said the trading environment remained harsh in minerals.

Mr Dwyer outlined a consolidation of the housing operations into two main US and UK divisions. The remaining European and Australian sites would be traded out, he said.

In contracting, there would be an emphasis on higher-margin negotiated work rather than open tender, and a focus on overseas projects.

Pre-tax profits of pounds 25.5m compared with a loss of pounds 111.6m in 1992. Earnings per share were 6.81p (loss of 40.1p) and the dividend was maintained at 5.25p. Gearing fell from 30 per cent to 5 per cent, a 10-year low, but would rise as Wimpey increased its land bank.

The buying programme, to achieve 20,000 plots, or three years' building, followed a 23 per cent increase in completions at 9,437, with 6,936 in the UK. Profits of pounds 25.4m compared with a pounds 33.3m loss in 1992.

Construction continued to be low, with a pounds 2.2m profit from more than pounds 650m of sales. Minerals benefited from a pounds 7.9m exceptional gain to increase profits from pounds 1.6m to pounds 13.1m.

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