Cuts in construction costs boost Taylor Wimpey profits

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Taylor Wimpey is on course to make a double-digit operating margin in 2012 following a drive to reduce building costs.

Half-year results released today for the six months to 3 July show the housebuilder boosting operating margins to 9.3%.

Taylor Wimpey also reported a strong rise in profitability – turning around a £2.3m pre-tax loss to a £28.9m pre-tax profit.

The company continues to target margins over volumes as the number of new homes completed during the period fell to 4,707 from 4,804.

Turnover dropped to £817.8m from £846m, however operating profits jumped 31% to £67.2m.

Pete Redfern, chief executive of Taylor Wimpey, said: “This has been a transformational six months for Taylor Wimpey, with the sale of our North American business and significant progress towards our double-digit operating margin target in the UK. 

“We have a strengthened balance sheet, an increased financial capacity to invest in the UK and we are well positioned to deliver further improvement in margin and returns going forward.

“Although there is ongoing uncertainty in the wider economic environment, current conditions in the UK housing market remain stable. 

“We expect this stability to continue for the remainder of 2011 and remain on course to deliver profits in line with the board’s expectations for the continuing group.”