Wilson Bowden sees tentative signs of housing recovery

THE HOUSING market slowed during the spring and has remained subdued throughout the summer, according to David Wilson, chairman of the housebuilders Wilson Bowden.

But there are some signs that the market is strengthening again. 'Things have been flat, but our current sales are now well up - in the South in the last week of August they were double the level of the same week last year and in the North they were 25 per cent up,' he said.

The second half is usually Wilson's strongest period for property sales. 'We wait to see if market conditions strengthen for the remainder of the year,' he said.

Mr Wilson believes that one reason the nascent housing market recovery faltered was because potential vendors, seeing predictions that house prices would rise sharply, decided to wait until they had experienced the benefit of the appreciation in their existing properties.

Wilson's pre-tax profits in the six months to June rose 46 per cent to pounds 16.5m on a comparable basis (1993 profits of pounds 16.8m included a pounds 5.5m pension scheme surplus), on turnover up 30 per cent to pounds 105.2m.

Operating profits from housebuilding were pounds 13.6m ( pounds 8.7m) on turnover up from pounds 65.1m to pounds 87.8m. Margins improved from 13.4 per cent to 15.5 per cent.

Wilson sold 965 properties in the first half, 17 per cent more than the same period last year, at an average selling price of pounds 91,000, up sharply from pounds 78,900.

The improvement was partly attributable to the good start the market enjoyed at the beginning of the year, and partly to the company's decision to concentrate on more profitable, larger, higher- priced homes. Growth in house prices had a minimal impact.

The group's commercial property arm had a good six months, with pounds 3.4m of operating profits almost equalling last year's exceptionally strong pounds 4m. Turnover was up from pounds 15.9m to pounds 17.4m and Mr Wilson said projects in hand should ensure this year's profits should show 'an encouraging increase' in comparison with 1993.

Earnings per share were 11.8p (14p) and the interim dividend is 2.85p (2.65p). The shares rose 2p to 417p.