Strong US performance boosts Taylor Wimpey

City A.M. Reporter
Housebuilder Taylor Wimpey has said stabilisation in the US market helped lift its 2010 profit and led to several approaches for its North American unit, which is under the hammer.

Volumes and margins beat expectations in Canada and the US, driving group underlying operating profit and pretax profit above expectations, the company said in its full-year trading update.

"Relative to our consensus expectations and our internal forecast, both (the US and Canada) outperformed in the period," chief executive Pete Redfern told Reuters.

"I wouldn't say a recovery quite yet (in the US), but we certainly saw stabilisation at the back end of the year."

The company is due to report results for 2010 on March 3.

Taylor Wimpey shares were trading about 6.7 per cent higher in the morning, helped by the improved guidance, and after it confirmed interest in its North American operations.

"We have received interest regarding our North American operations and we are in the early stages of evaluating these approaches," the company said.

Taylor Wimpey put its US homebuilding unit Taylor Morrison on the auction block in November, after the operations were earmarked for disposal to focus on its domestic operations and lower debt.

"We had felt towards the end of the year it was likely to be going towards a point when we would initiate that process, but obviously having a (in the US) makes a big difference," said Redfern.

The housebuilder, which has businesses in Britain, Spain and North America, would not comment on the approaches.

Analysts expect a sale at around the book value of the US and Canadian units, approximately £600m, with the units to be sold either separately or a package.