Overview
Market conditions in both the UK and North America during 2009 were better than those experienced during 2008, although they still remained challenging. The Group continued its focus on cash generation through the year and, as a result, year end net debt has been reduced to c.£750 million, substantially below the £1,529 million at 31 December 2008.
Our UK business has maintained its encouraging performance since our Interim Management Statement in November and we enter 2010 with a very strong order book position, up 28% by volume compared to the end of 2008. In North America, we are encouraged by the prolonged period of stability we have experienced since early 2009. The Board therefore expects to report full year results in line with its expectations.
UK Housing
Our net private reservation rate for the full year was 0.55 homes per outlet per week, a 37.5% increase against the 0.40 achieved in 2008. These reservation rates include the effect of cancellations, which have also shown significant improvement to 18.7% for 2009 as a whole against 37.5% in 2008. Selling prices increased over the course of the year, as a result of both mix and underlying price inflation. We had 310 active outlets at the end of 2009 (30/06/2009: 333, 31/12/2008: 386).
We completed a total of 10,186 homes in 2009 (FY 2008: 13,394) of which 8,432 were private completions (FY 2008: 10,585) and 1,709 were affordable homes (FY 2008: 2,751) with 45 joint venture completions (FY 2008: 58). The overall average selling price for completions in the full year increased to £160k from £153k in the first half of 2009 (FY 2008: £171k), with private average selling prices increasing to £171k (H1 2009: £163k, FY 2008: £187k) and affordable average selling prices broadly flat at £108k (H1 2009: £109k, FY 2008: £108k).
We enter 2010 with a very strong order book position. We have increased our private order book by 62% to 3,048 homes (31/12/2008: 1,887 homes). Including affordable housing reservations, our year end order book was 5,431 homes, an increase of 28% from the order book position at the end of 2008.
We are active in the land market and approved new land purchase commitments for 3,003 plots at 22 new sites during the second half of 2009. Our strong, southerlyweighted landbank and ongoing opportunities to convert further plots from our strategic landbank enable us to continue to be highly selective regarding the opportunities that we pursue.
Current market conditions are stable, with supply remaining restricted and demand solid. However, the risks of further weakness in the wider economy and reduced mortgage availability remain. Our operational focus remains on build cost reduction and achieving sales price increases and we are well positioned to deliver an improved operating margin in 2010.
Group
Our year end net debt was c.£750 million, in line with our recently upgraded guidance and substantially below the £1,529 million at 31 December 2008. This provides significant headroom against our year end covenant tests.
Although the preparation of our year end financial accounts is still in progress, we do not anticipate making any further material adjustments to land values following the completion of our carrying value review.
Taylor Wimpey will be hosting a call for analysts and investors at 08:30am today to discuss this statement. Dial in details for the call can be obtained from Finsbury on +44 (0)20 7251 3801. A recording of the call will be made available on our website later today.
