Housebuilder Taylor Wimpey revealed a jump in underlying UK profits today, but racked up an overall loss thanks to hefty write downs in its overseas markets.
The group, which sells homes under the brands George Wimpey, Bryant Homes, G2, Wilson Connolly and Laing Homes, saw pre-tax profits in the UK rise 14% to £608.5 million for 2007.
This came as the firm delivered improved margins to offset a 6% fall in the number of completions in the UK last year to 20,690. Average selling prices nudged up to £188,000 from £186,000.
Poor conditions in the US - which accounts for nearly a fifth of total sales - and Spain saw the group take a near £300 million write off on land and property in the countries.
Taylor made an overall pre-tax loss of £19.5 million for 2007, compared to profits of £409.5 million the year before.
Chief executive Pete Redfern said he continued to anticipate a "more difficult" trading environment in the UK this year, with no "significant" improvement expected in the US either.
Shares fell 4% as Taylor said its UK order book at the end of February was a fifth down on the prior year, the same position as at the year end. UK orders stood at £1.34 billion at February 29.
The group, which was created following July's merger of Taylor Woodrow and George Wimpey, said although sales and cancellation rates had improved in the early part of the year, they were weaker than seasonal norms.
Cancellation rates for the latter half of last year were running above 30%, compared to an average of 20%.
Taylor said: "We anticipate that the current subdued conditions will continue, with interest rates and mortgage availability being key determinants of customer confidence."
UK revenues last year were £4 billion, down from £4.15 billion in 2006 as a result of the poorer completion levels last year.
In the US, the number of completed sales dived 24% to 6,740 last year, with the average selling price falling to £175,000 from £202,000.
Taylor said it was not approving any more land purchases in the US while it worked to sell existing sites.
"Current conditions in the US require us to focus in the short to medium term on cost reductions and cash management," it said.
House sales in Spain 44% fell to 212.
Shares in Taylor Wimpey have slumped more than two thirds since April as the credit crunch took its toll on the sector.
Broker Numis Securities said: "Taylor Wimpey's full-year results show the group posting a credible performance in the UK business but the ongoing weak conditions in both the US and Spain persist and are likely to do so over the remainder of 2008."