TWOD Taylor Woodrow

RNS Number:7078O
Taylor Woodrow PLC
10 July 2005



TAYLOR WOODROW plc TRADING UPDATE

Taylor Woodrow plc will be announcing its half-year results on September 6th 
2005.  In advance of this, the company is providing the following update to 
trading for the six months to June 30th 2005.

We continue to make good progress in delivering our strategy and expect
operating profit for the half year to be slightly ahead of market expectations,
although down on a strong first half last year.

Overall Housing

As previously indicated, overall housing completions were down - 8% on last year
at 5,064 (H1 2004: 5,521). Average selling prices for the Group improved by 1%
to #200,000 (2004 H1: #198,000) and margins remained broadly level. We are
continuing to see the benefit of our strategy over the last three years of
investing disproportionately in North America relative to the UK. The group
remains well placed for growth, with the total housing order book up 9% at
#1.60bn (2004 H1: #1.46bn) and our landbank up 16% at around 73,700 units
(December 2004: 63,701 units), both mainly driven by North America.

UK Housing

We enjoyed a strong sales performance relative to a market which was much more
difficult than in the first half of last year; total net reservations were down
by 1%, from 3% more sites. Net reservations per site were down by 4%, which is
significantly better than the market as a whole. Completions were down 17% at
3,194 (H1 2004: 3,869), despite having started the year with an order book that
was down 32% on the previous year. The order book now stands at around #600m,
18% lower than at June 2004 (#733m).

Average selling prices were down 3% to #194,000 (H1 2004: #199,000), with the
reduction mainly attributable to a slightly higher proportion of social
completions and apartments than in the same period last year. Overall,
underlying prices are stable. We have continued to use part exchange in a
disciplined manner and have reduced our stock levels by over 10% (December 2004:
#74m).

Operating margins have reduced by just under 0.5% (H1 2004: 16.1%). This
includes the benefit of higher than usual land sales, such as the Quartermile
project in Edinburgh, which was completed in January. Underlying housing
operating margins fell by 2% to around 14%, reflecting a more competitive
market, reduced overhead recovery on lower volumes and ongoing cost pressures.
We continue to focus on cost control through supply chain management, use of
standard products and pull through from strategic land. Although planning
remains difficult, we have been successful in securing consents on strategic
land, for example, with the approval for 2,300 homes in Swindon.

As a result of this and prudent purchasing in the land market, we have increased
our land bank by 4% to around 33,800 units (December 2004: 32,459). Over one
third of our total land bank has been sourced through our strategic land
programme.

North America Housing

The North America housing market remains very strong. Home completions increased
by 11% to 1,667 (H1 2004: 1,500) at an average selling price up 11% to
US$398,000 (H1 2004: US$358,000). Operating margins will be around 1.5% higher
than the 15.0% reported for H1 2004.

The markets in California, Arizona and Florida continue to be strong with robust
selling price growth. This is tempered by rising build costs due to some
materials shortages and increased energy costs. The Texas market has not seen
the same levels of selling price growth as our other US markets. In Canada, the
market started slowly due to inclement weather, but has now returned to more
normal levels. North America will represent a higher proportion of Group
operating profit in the first half of 2005 than in the same period last year (H1
2004: 24%).

At the end of the first half our order book was up by 40% at US$1.65bn (H1 2004
US$1.18 bn). This includes over $200m of sales revenues from our new high rise
condominium business in Florida that is scheduled to complete this year. We have
increased our land bank by 27% to around 38,000 units (December 2004: 30,009).

Spain and Gibraltar Housing

In Spain and Gibraltar, home completions increased by 34% to 203 (H1 2004: 152).
Average selling prices are down 13% to #163,000 (H1 2004: #188,000) reflecting a
change in geographic mix. Operating margins will be around 5% higher than the
28.1% reported for H1 2004.

At the end of the first half our order book was up by 10% at #86m (H1 2004:
#78m) and the land bank was 54% higher at around 1,900 units (December 2004:
1,233).

Other

Taylor Woodrow Construction increased its external order book by about 8%.
Internal work in the order book fell by a third, reflecting a continued shift
away from high rise city centre developments. Operating margins will be broadly
in line with last year (H1 2004: 2.5%).

During the first half, we completed the sale of the Orchard shopping centre at
Didcot, realising some #30m in cash. We remain on track to dispose of the
remainder of our business park portfolio by the end of the year, releasing
approximately #50m of cash. The sale of the K2 development property was
completed on 1st July for a cash consideration of #117m and will be recognised
in the second half of 2005.

Net debt at the end of June was at a similar level to last year (H1 2004:
#801m).

Outlook

All of our markets have good long term fundamentals. Taylor Woodrow's strategy
of increasing investment in our overseas markets at a time of short term
uncertainty in the UK housing market continues to bear fruit. The outturn for
2005 remains dependent on near term market conditions in the UK where we expect
margins to continue to be under pressure. However, our balance of profit
generation between the UK, North America and Spain, together with a record order
book and land bank, means that we remain well placed to deliver future growth.

                                    - ends -
Notes to editors:

Taylor Woodrow is a housing development group. Its primary business is the
development of sustainable communities of high quality homes in the UK and in
selected markets in North America and Spain. The company is listed on the London
Stock Exchange and in the year ending 31 December 2004 turnover increased by 26%
to #3.3 billion.

For further information please visit the company's website -
www.taylorwoodrow.com

For further information, please contact

Ian Morris                                 0121 600 8520 / 07816 518 767
Taylor Woodrow Public Relations

John Holland-Kaye                          0121 600 8394 / 07816 517 200
Taylor Woodrow Investor Relations

Charles Cook / Dan de Belder               020 7861 3232 / 07710 910 563
Bell Pottinger




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