Housebuilder Westbury reported a slump in first-half profits yesterday amid tough times for the British housing sector.
It revealed that pre-tax profits for the half year to 31 August fell by 26 per cent to £45.4m on falling sales. It sold £415m of homes compared to £427 last year.
Chairman Geoffrey Maddrell, said: “The market for 2005 through to August did improve from the lows of 2004, but the levels of activity were still lower than we expected. Currently there is a short-term lack of confidence in the buying public.” Westbury, which operates at the upper end of the house price market, appears to be suffering more than other builders, such as Barratt, Bellway, Persimmon and Redrow, who have all managed to prevent a slump in sales and profits.
Chris Millington, analyst at Bridgewell Securities, said: “House prices at Westbury are slightly higher than the four others, and that has impacted sales.”
A major factor in the profit fall was low margins due to higher costs for land, materials and labour but an absence of house price inflation.
Westbury executive director Colin Cole said: “Our first-half performance has been hit by lower volumes, higher incentives and marketing costs, and price pressures.”
He added rising interest rates and oil prices had contributed to lower consumer confidence, while lengthy planning procedures were also a problem.
“We are being squeezed at both ends of the spectrum. But we remain confident in the strength of our business and our plans,” he said.
Westbury announced a 15 per cent interim dividend increase, to 6.1p.