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Wimpey profits gloom

House builder George Wimpey warned that profits would be well below last year due to higher interest costs and the impact of lower volumes and margins.
The company said today: ' While 2005 started encouragingly, the recovery was short-lived and since February the market has remained steady at a level well below the very strong first few months of last year.'

Total completions for the first half will dip 10 per cent below the same period in 2004, while average selling prices remained broadly unchanged.

But sales rates have been 17.5 per cent below 2004, and the company is expecting gross margins to fall 2.5 per cent.

It said: 'The UK housing market is supported by a strong demand for and undersupply of housing, although in the short term we expect buyers to remain cautious with prices broadly stable.'

Wimpey added that US outfit Morrison Homes benefited from an extremely strong housing market. As a result of the rising market conditions in Morrison's main markets, sales releases have been held back to get the best prices.

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