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Taylor Wimpey returns to profit

Housebuilder Taylor Wimpey has swung back into profit, it said this morning.

The group recorded pre-tax profits of £19.6 million for the six months to June 30, against losses of £672.7 million in 2009 when it was forced to write down the value of work in progress by more than £500 million.

Taylor Wimpey said its focus on maximising margins rather than looking to accelerate volume growth was the right strategy in an environment where it faced possible changes to planning policy and wider economic uncertainty.

It added that the UK housing market had been “relatively robust”, despite uncertainties stemming from the general election.

Revenues for the division increased 11.1% to £827.1 million after it completed a total of 4,804 homes in the first half, a slight increase on a year earlier. The average selling price rose by 9.8% to £168,000, with changes in the type of properties sold helping to improve the figure.

It opened 46 new outlets during the half year, although the average number of sites reduced to 295 from 322 in the second half of 2009.

“Our priority continues to be maximising the value achieved from each home completion rather than looking to grow volumes ahead of underlying improvements in market conditions,” the company said.

The firm has a supply of land, which will last around six years at current build rates and which represents 19 per cent of the final build cost per unit.

There were no exceptional charges in the first half of the 2010 financial year, while in the same period of 2009, its land bank and work in progress were written down by £527m.

In the future, it will not focus entirely on volumes but will aim to maximise profitability from each sale.