Wimpey reaps reward of mega-deal

Six months after the œ600 million Wimpey/Tarmac asset swap, Wim-pey chairman Joe Dwyer said he was happy with the outcome of the construction industry's largest ever transaction.

Wimpey is now the UK's largest housebuilder, with 6,700 private sales in the six months to June 1996.

It swapped its construction and minerals businesses for Tarmac's housing division, still trading as McLean Homes. The mega-deal resulted in a œ14.5 million restructuring cost and 200-300 redundancies.

Wimpey's latest interim results (six months to June) were revealed on Tuesday. Exceptional costs led to a loss before tax of œ9 million (œ1 million profit).

The Wimpey Homes division made an operating profit of œ3 million (œ11 million) from a œ190 million turnover. House prices, compared on a like-for-like basis, fell by œ2,000.

Gross margin slipped from 19 per cent to 14 per cent, a consequence of modest increases in both building costs and land prices.

Dwyer said it was "a disappointing result", though he added that "in the second half the figure could be 1.5 per cent higher."

McLean Homes also turned in a 14 per cent gross margin though the figure masked a month-by-month improvement. Margins reached 16 per cent by August and should be up to 17 per cent by the end of the year.

Commenting on the Wimpey Group's overall performance, Dwyer said that operating profits for the full year would be the highest since the onset of the recession in 1990. He anticipated a one per cent rise in house prices in the second half.

l Construction still lowest profit sector - page 2