Taylor Wimpey plc Interim Results 2007
1 Disclaimer
This presentation is not intended, and does not, constitute or form part of, any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Taylor Wimpey plc or any other invitation or inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.
Past performance cannot be relied upon as a guide to future performance.
Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements.
2 Interim Results for the half year ended 30 June 2007 Basis of preparation of pro forma information
To assist investors in understanding the performance of the enlarged Taylor Wimpey plc Group, pro forma analyses have been prepared, in which the two underlying sets of financial and operational information for the six months to 30 June 2007 for Taylor Woodrow plc (“TW”) and the 26 weeks to 1 July 2007 for George Wimpey Plc (“GW”), have been aggregated to illustrate the effect of the merger of TW and GW as if the transaction had taken place on 1 January 2007. The results from the two businesses have been prepared on the basis of the existing accounting policies in the two Groups. In aggregating the two sets of financial information, intra-Group trading and balances between the two entities have not been eliminated.
The excess of the fair value of shares issued to acquire the GW business over the net assets less book goodwill has been recognised as an provisional goodwill number. Full acquisition accounting will be performed during the second half of 2007 in which this provisional goodwill number will change due to accounting policy alignments, fair value adjustments on the GW net assets acquired and the recognition of other intangibles. The financial statements for Taylor Wimpey plc for the year ended 31 December 2007 will include the full impact of acquisition accounting.
3 Interim Results for the half year ended 30 June 2007 Introduction Norman Askew, Chairman
4 Agenda
> Introduction Norman Askew
> Financial Review Peter Johnson
> Integration, Strategy and Outlook Pete Redfern
> Questions and Answers
5 Interim Results for the half year ended 30 June 2007 Group performance
> Merger of George Wimpey Plc and Taylor Woodrow plc became effective on 3 July 2007
> Integration progressing well: substantial progress made, operating as a combined business in both UK and North America
> Operating businesses combined with strong management teams in place
> Annualised pre-tax synergy estimate increased to £100m
> Strong UK Housing margin performance, with both businesses advancing margins significantly in the first half of 2007
> Land provisions of £86m in Taylor Woodrow’s North American business arising from continued decline in Florida and California markets (including the £25.1m announced in early May)
> Interim dividend: 5.5 pence per share (H1 2006: 5.0p)
> £750m share buy back commencing today, to be completed during the next eighteen months
6 Interim Results for the half year ended 30 June 2007 Financial Review Peter Johnson, Group Finance Director
7 Pro forma combined group Summary income statement
Six months to 30 June 2007 £m TW GW Pro forma † Consolidated revenue 1,401.9 1,270.0 2,671.9 Cost of sales (1,170.1) (1,056.2) (2,226.3) Gross profit 231.8 213.8 445.6 Profit on disposal of properties and investments 5.8 - 5.8 Administrative expenses (99.6) (54.4) (154.0) Share of results of joint ventures 12.2 3.6 15.8 Profit from operations before exceptional items 150.2 163.0 313.2 Exceptional items (101.5) (16.6) (118.1) Profit from operations 48.7 146.4 195.1 Net finance costs (30.4) (23.8) (54.2) Profit before tax 18.3 122.6 140.9 Tax 4.6 (39.7) (35.1) Profit for the period 22.9 82.9 105.8
† Basis of preparation of pro forma information is detailed on slide 3
8 Interim Results for the half year ended 30 June 2007 2007 First half segmental analysis
Revenue £m Profit from Operating operations* £m margin* % £m H1 2007 H1 2006 H1 2007 H1 2006 H1 2007 H1 2006 GW UK 1,042 1,031 162 114 15.5 11.1 GW US 228 366 870 3.5 19.1 Other - - (7) (6) GW total 1,270 1,397 163 178 12.8 12.7
TW UK 752 713 101 80 13.4 11.3 TW NA 343 433 46 96 13.4 22.2 TW Spain 30 43 212 6.0 27.3 TW Construction 277 262 150.6 2.0 TW total 1,402 1,451 150 193 10.7 13.3
Pro forma total 2,672 2,848 313 374 11.7 13.1
* Before exceptional items and after joint venture interest and tax
9 Interim Results for the half year ended 30 June 2007 2007 Interest charge
£m Taylor Woodrow George Wimpey H1 2007 H1 2006 H1 2007 H1 2006 Loans 24.1 28.4 19.7 22.3 Pensions 0.7 2.1 2.5 3.9 Derivatives (1.4) (1.4) (4.5) (3.1) Other 7.0 3.2 6.1 3.0
Total 30.4 32.3 23.8 26.1
10 Interim Results for the half year ended 30 June 2007 Pro forma combined group Balance sheet
30 June 2007 £m TW GW Acquisition Pro forma † entry Goodwill 362.9 5.4 249.8 618.1 Fixed assets and joint 77.5 64.8 - 142.3 ventures Land 1,867.7 2,360.0 - 4,227.7 Deferred terms (314.3) (470.7) - (785.0) Other net operating assets 921.2 529.9 - 1,451.1 Tax and provisions 11.3 (85.9) - (74.6) Net pension deficit (145.5) (88.8) - (234.3)
Total capital employed 2,780.8 2,314.7 249.8 5,345.3
† Basis of preparation of pro forma information is detailed on slide 3
11 Interim Results for the half year ended 30 June 2007 Pro forma combined group Cash flow summary
£m H1 2007 H1 2007 H1 2007 TW GW Pro forma † Profit from operations before exceptional items 150.2 163.0 313.2 Land realisations 236.1 362.7 598.8 Land spend (320.1) (501.7) (821.8) Other adjustments including movements in (299.6) (85.8) (385.4) working capital
Cash outflow from operations (233.4) (61.8) (295.2)
Interest / tax (108.0) (62.2) (170.2) Dividends - (28.7) (28.7) Exchange rate / other 26.7 13.9 40.6 Increase in net debt (314.7) (138.8) (453.5)
† Basis of preparation of pro forma information is detailed on slide 3
12 Interim Results for the half year ended 30 June 2007 UK Housing Market overview
> Overall market has been stable in the first half > Continue to see regional variations > London and surrounding areas stronger than rest of the UK > Price inflation for new build continues to be below levels reported by national surveys
> Recent interest rate rises > Lead indicators show a slight change in sentiment > Sales levels remain solid
> No material shift in competitive environment
> Continuing undersupply of new housing
13 Interim Results for the half year ended 30 June 2007 UK Housing Taylor Woodrow financial summary
H1 2007 H1 2006 Change % FY 2006 Ave no of active sites 210 202 4.0 207 Legal completions - total 3,378 3,369 0.3 8,294 Private 2,799 2,914 (3.9) 7,017 Affordable 579 455 27.3 1,277 Ave selling price – total £ 205,400 193,100 6.2 192,700 Private 224,100 207,000 8.3 209,500 Affordable 115,600 104,700 10.4 100,200 Revenue** £m 780.3 742.2 5.1 1,842.0
Profit from operations* £m 103.0 82.0 25.6 221.5 Operating margin* % 13.2 11.0 2.2ppt 12.0
Order book £m 700.0 649.0 7.9 534.0
* Before joint venture interest and tax ** Including share of joint ventures revenue
14 Interim Results for the half year ended 30 June 2007 UK Housing George Wimpey financial summary
H1 2007 H1 2006 Change % FY 2006 Average no of outlets 269 286 (5.9) 275 Legal completions - total 5,828 5,854 (0.4) 13,616 Private 5,040 5,138 (1.9) 11,982 Affordable 788 716 10.1 1,634 Ave selling price – total £ 178,600 175,500 1.8 175,400 Private 189,600 187,200 1.3 186,400 Affordable 108,500 91,700 18.3 94,900 Revenue £m 1,041.8 1,030.4 1.1 2,391.2
Operating profit* £m 158.5 114.9 37.9 310.0 Operating margin* % 15.2 11.2 4.0ppt 13.0
Order book £m 1,083.5 1,057.1 2.5 781.9 •Excluding joint ventures Operating profit in H1 2007 includes £23.1m profit received in compensation in relation to land options no longer deemed suitable for residential development.
15 Interim Results for the half year ended 30 June 2007 North America Housing Market overview
> US market conditions generally tough > Arizona > High levels of inventory resulting in strong competition on price > Some signs of stabilisation > California > Continues to be difficult, with affordability stretched in most markets > Supply constrained Bay Area market > Florida > Market conditions have worsened as discretionary purchasers delay their decisions > Texas > Healthy, although some submarkets seeing impact from tightening of lending criteria
> Canada market remains healthy
16 Interim Results for the half year ended 30 June 2007 North America Housing Taylor Woodrow financial summary
H1 2007 H1 2006 Change % FY 2006 Ave no of active sites 124 100 24 108 Home completions 1,376 1,512 (9) 4,492 Ave selling price £ 228,800 243,000 (6) 232,500 Lot completions 354 1,463 (76) 2,640 Revenue** £m 353.2 446.7 (21) 1,194.3
Profit from operations* £m 46.4 96.0 (52) 221.3 Operating margin* % 13.1 21.5 (8.3)ppt 18.5
Order book £m 484 881 (45) 436
* Before joint venture interest and tax ** Including share of joint venture revenue
17 Interim Results for the half year ended 30 June 2007 North America Housing Morrison Homes financial summary
H1 2007 H1 2006 Change % FY 2006 Ave no of outlets 117.5 102.2 15 106.9 Legal completions 1,543 1,968 (22) 4,347 Ave selling price £ 147,900 186,100 (21) 161,500 Revenue £m 228.2 366.2 (38) 756.2
Operating profit £m 8.1 70.0 (88) 116.9 Operating margin % 3.6 19.1 (15.5)ppt 15.5
Order book £m 173.6 372.9 (53) 113.5
18 Interim Results for the half year ended 30 June 2007 North America Housing Land write downs
> Morrison Homes > £60.7m write down in 2006 > No further write downs in H1 2007
> Taylor Woodrow > Write downs to date £45.3m > £20.2m write downs in 2006 > £25.1m announced at AGM on 2 May 2007 > Further provision of £60.9m required due to ongoing weaknesses in Florida and Southern California
19 Interim Results for the half year ended 30 June 2007 Spain and Gibraltar Housing Financial summary
H1 2007 H1 2006 Change % FY 2006 Ave no of active sites 32 25 28 28 Legal completions 103 171 (40) 379 Ave selling price £ 284,400 190,000 50 205,200 Revenue £m 30.0 43.6 (31) 92.1
Operating profit* £m 1.8 11.9 (85) 26.4 Operating margin % 6.0 27.3 (21.3)ppt 28.7
Order book £m 91 92 (1) 100
* 2006 operating profit includes £7.9m from a land sale
20 Interim Results for the half year ended 30 June 2007 Taylor Woodrow Construction Financial summary
H1 2007 H1 2006 Change FY 2006 Profit before tax £m 5.0 7.2 (31) 13.0
Internal work 6% 12% (6)ppt 10%
External order book £m 1,163 1,087 7 1,165
21 Interim Results for the half year ended 30 June 2007 Merger accounting
> Fair value exercise during H2 > Will include review of land values of George Wimpey and Morrison Homes businesses > Different process from the reviews of land values already undertaken in North America
> Goodwill > Acquisition price set by closing market price on 2 July 2007
> Alignment of accounting policies > Not reflected in the numbers presented today
> Integration will mean that legacy businesses will not be reported separately at the Preliminary Results
22 Interim Results for the half year ended 30 June 2007 Pro forma combined group Balance sheet financing
30 June 2007 TW GW Acquisition Pro forma † entry Shareholders’ funds £m 2,072.8 1,788.8 249.8 4,111.4 Minority interests £m 2.0 - - 2.0 Net debt £m 706.0 525.9 - 1,231.9
Capital employed £m 2,780.8 2,314.7 249.8 5,345.3
Gearing 34% 29%
Interest cover* (last 12 months) 6.9 8.2
Cash interest cover* (last 12 8.4 8.8 months)
† Basis of preparation of pro forma information is detailed on slide 3 * Before exceptional items
23 Interim Results for the half year ended 30 June 2007 Review of ongoing capital requirements
> Announced intention to undertake review in merger documentation
> Ensure requirements for growth are balanced by a suitable capital structure
> Ongoing targets (in normal market conditions) > Adjusted gearing (excluding goodwill and pensions) - 40% to 60% > Interest cover - 5 to 7 times
> Review now completed > Board has authorised share buy back of up to £750m > Programme commencing with immediate effect > To be completed during the next 18 months > Requires approval of shareholders to the extent that it exceeds 10% of the Group’s issued share capital
24 Interim Results for the half year ended 30 June 2007 Integration, Strategy and Outlook Pete Redfern, Group Chief Executive
25 Strategy summary
> Focus on our two major businesses
> UK > Goal to be the best homebuilder in the UK > Current priority is margin growth, followed by; > Volume growth from increased outlets
> North America > Goal to be the most successful quality homebuilder in our high growth markets > Current focus on managing tough conditions – ‘cash and costs’, followed by; > Reinvestment at lower cost as market turns
> Both strategies are strengthened by the merger > Direct synergies upgraded to £100m > Improved local business strength > Complementary skills in both countries
26 Interim Results for the half year ended 30 June 2007 Integration progress
> Excellent progress to date
> Taylor Wimpey operating as combined business from 3 July
> New management team in place in UK and North America > New combined Corporate office in central London by September > New combined UK Housing head office in Stokenchurch by end of October > Combined North America head office in Bradenton, Florida
> Just over 700 redundancies across the Group > Almost all staff now have certainty on their circumstances
> Brand strategy > Operating under Bryant, George Wimpey and G2 brands in UK > Laing Homes and Wilson Connolly brands to be retired in UK - complete by June 2008 > Retain Monarch, Morrison Homes and Taylor Woodrow brands in North America
27 Interim Results for the half year ended 30 June 2007 Integration progress
> 34 regional businesses Bryant Homes offices > 10 in the North division George Wimpey offices > 12 in the Midlands division > 12 in the South division
> Five satellite offices > Aberdeen, West Scotland, Peterborough, Oxfordshire and Exeter
> Four regional offices closing > Taylor Woodrow South (based in Newbury) > Taylor Woodrow Yorkshire and North East (based in Leeds) > George Wimpey North London (based in Hertford) > George Wimpey Central (based in Warwick)
28 Interim Results for the half year ended 30 June 2007 Integration progress
Head office > Head office based in Bradenton, Divisional offices Florida
> 18 divisional offices Canada
California
Arizona
Texas Florida
29 Interim Results for the half year ended 30 June 2007 Synergies
> Overall target revised upwards to £100m > Aim to achieve this annualised run rate of £70m by end of 2008 > Remaining £30m by end of 2009
Overheads Build and Sales costs TOTAL procurement Corporate 10 - - 10 UK 40 25 5 70 NA 10 10 - 20 TOTAL 60 35 5 100
> One-off costs of around £60m > Majority will be incurred in H2 2007
> Synergies in addition to previous George Wimpey targets > £25m UK cost savings > $20m US cost savings > Remain on course to deliver both
30 Interim Results for the half year ended 30 June 2007 Margin growth in the UK
> Already making excellent progress
Operating margin % H1 2007 H1 2006 Change ppt FY 2006 George Wimpey* 15.2 11.2 4.0 13.0
Taylor Woodrow** 13.2 11.0 2.2 12.0
* Excluding joint ventures. Operating margin in 2007 includes one off compensation payment ** Including operating profit from joint ventures but excluding joint venture interest and tax
> Key elements of margin programme are > Change in land portfolio to balanced short/medium/long term > Build cost reduction plan > Reduction in overheads through merger efficiencies > Sales shift to more forward selling, and reduced incentives
> Each element is already well underway and will deliver benefits during next 12 months
31 Interim Results for the half year ended 30 June 2007 Margin growth in the UK Balanced land portfolio
> Merger delivers a more balanced UK landbank
100,000
80,000 Long term land 60,000
Plots Medium term land 40,000 Short term land
20,000
0 George Wimpey Taylor Woodrow Pro-forma
> Balanced landbank provides > Opportunity to add value through planning and development > More stable base for business planning > Opportunity for land swaps and dual branding
> Taylor Woodrow analysis showed gap between margin on strategic land and oven ready land up to 10%
32 Interim Results for the half year ended 30 June 2007 Margin growth in the UK Build cost reduction
> Greatest opportunity is to improve cost efficiency across the businesses > Historical difference of 4% of revenue or c £8k per plot > Work underway looking at procurement, design, specification and cost efficiency > We have assumed £25m in expanded synergies > Balance is value adding specification or due to site mix
> Continuous cost reduction process introduced by Ian Sutcliffe will remain across the whole business > Ongoing cost saving potential on George Wimpey sites
33 Interim Results for the half year ended 30 June 2007 Margin growth in the UK Shift in sales strategy
> In 2006 the two companies have run at an average sales rate of c.45 compared with an industry range of 30-40
> Driven by incentives and investor selling often at peak sales period
> Have already started to reduce this, expected to affect 2007 volumes, but be recovered as outlet numbers grow
> Goal is to grow volumes steadily from this base. Business has capacity to get to 600 outlets, dependent on planning
> In addition both companies have deliberately lengthened order books over last few years
34 Interim Results for the half year ended 30 June 2007 Strategic objectives North America
> Long term goal is to be the leading quality housebuilder in the growth markets
> Merger gives us additional strength in these areas > Broad market coverage with two brands > Increased economies of scale on regional level > Home builder efficiency plus land developer strategy
> In the short to medium term the approach is tactical to manage current market conditions > Maintain steady sales position > Focus on cost reduction > Remove investment from unprofitable developments > Recycle into best locations at lower prices
35 Interim Results for the half year ended 30 June 2007 North America Tactics in tough market - operational
> Maintain steady sales pace > Normal market pace c0.9 per outlet per weak > Reasonable target c0.6 - 0.65 per outlet per week on all sites > Keeps efficiency levels up and starts to create cash > Higher incentives on short term positions, lower on good long term masterplans
> Strong focus on cost reduction > Reduced total number of people by nearly 25% > Drive on materials and subcontract negotiation leading to savings of between 5% and 10% of costs
> Very experienced and capable team
36 Interim Results for the half year ended 30 June 2007 North America Tactics in tough market - land
> Current land investment cautious and significantly reduced > Total new approvals in 2007 excluding Canada c$50m > Many option take downs renegotiated or exited > 49% reduction in number of controlled plots
> Land market generally very slow, with most US publics totally out of the market in all areas > Creates some opportunities today in the stronger markets
> Starting to see distressed sellers bringing land to market: > ‘A’ locations > Improved pricing > Improved terms
> Remain active but cautious in land market
37 Interim Results for the half year ended 30 June 2007 Outlook Spain and Gibraltar and Taylor Woodrow Construction
> Spain and Gibraltar > Markets in Mallorca and Gibraltar are stable > Market conditions on the mainland are difficult > Expect full year completions to be below 2006 levels > Profits will be below 2006 levels, which included a significant land sale
> Taylor Woodrow Construction > Remains on course to deliver stable performance > Profit timing weighted towards second half
38 Interim Results for the half year ended 30 June 2007 Outlook North America Housing
> Long term fundamentals remain good, short term market conditions very tough > Impact of credit concerns on wider market > Inventory levels stubbornly high > Affordability issues in many markets
> Expect conditions to remain tough through the next 12 months
> Margin and return on capital will be significantly below the exceptional levels reported in 2006
> Short term focus remains on > Managing costs and delivering synergies > Delivering a steady flow of sales to keep business momentum > Delivering a steady flow of cash for reinvestment
39 Interim Results for the half year ended 30 June 2007 Outlook UK Housing
> Continuing undersupply of new housing in the UK > Welcome the proposals within the new Housing Bill and the OFT review > Objective to deliver increased outlets leading to increased volume in future years
> Market conditions currently remain stable > Anticipate more subdued conditions in H2 due to impact of interest rate rises
> H2 focus will be on margin improvement and delivery of synergies, rather than volume
> Confident that will deliver 14% operating margin for combined business in current market (excluding fair value exercise)
40 Interim Results for the half year ended 30 June 2007 Summary
> Merger has created the UK’s leading homebuilder, with outstanding opportunities to create value for shareholders > Margin growth in the UK > Economies of scale in the UK > Strengthened UK landbank > Recovery and growth in North America
> Excellent progress on integration, operating as combined business
> Strong UK performance in first half now c.80% of the Group revenue
> Continuing market weakness in North America, but the difficult action has been taken
> £750m share buy-back programme over next 18 months, based on confidence in future of business and ability to use capital efficiently
41 Interim Results for the half year ended 30 June 2007 Future investor communications
> Trading update and analyst presentation October 2007
> Trading update January 2008
> Preliminary results presentation 6 March 2008
42 Interim Results for the half year ended 30 June 2007 Questions and Answers
43 Interim Results 2007 Appendices
44 Appendices Contents
> Group financial information
> UK Housing financial information
> North America Housing financial information
> Spain and Gibraltar Housing financial information
45 Interim Results for the half year ended 30 June 2007 Exceptional items
£m Taylor Woodrow George Wimpey H1 2007 H1 2006 H1 2007 H1 2006 North America land write down (86.0) - -- Provision for legal (15.5) - -- Transaction costs - - (16.6) -
TOTAL (101.5) - (16.6) -
46 Interim Results for the half year ended 30 June 2007 Undeveloped land disposals
£m Taylor Woodrow George Wimpey H1 2007 H1 2006 H1 2007 H1 2006 Land sales UK 66.1 70.3 31.7 16.2 US 28.4 66.9 0.5 - Spain and Gibraltar - 10.3 -- TOTAL 94.5 147.5 32.2 16.2
Profit UK 15.8 9.4 9.1 10.6 US 13.8 18.9 -0.1 Spain and Gibraltar - 7.4 -- TOTAL 29.6 35.7 9.1 10.7
George Wimpey land sales are not included in revenue. Profits on land sales are included in net operating expenses.
Taylor Woodrow land sales are included in revenue. Costs of land sold are included in cost of sales and overheads associated with land sales are included in administrative expenses.
47 Interim Results for the half year ended 30 June 2007 UK Housing Pro forma financial summary †
H1 2007 H1 2006 Change % Average outlets/active sites 479 488 (2) Legal completions - total 9,206 9,223 - Private 7,839 8,052 (3) Affordable 1,367 1,171 17 Ave selling price – total £ 188,400 181,900 4 Private 201,900 194,400 4 Affordable 111,500 96,800 15 Revenue £m 1,793.3 1,743.7 3
Operating profit* £m 263.0 194.7 35 Operating margin* % 14.7 11.2 3.5ppt
Order book £m 1,637.7 1,564.5 5
† Basis of preparation of pro forma information is detailed on slide 3 * Including share of joint venture profits after interest and tax
48 Interim Results for the half year ended 30 June 2007 Taylor Woodrow Group reservations
£m Reservations Ave outlets Per outlet / per week H1 2007 H1 2006 H1 2007 H1 2006 H1 2007 H1 2006 UK private 3,637 3,959 UK affordable 558 455 UK TOTAL 4,195 4,414 210 202 0.77 0.84
NA TOTAL 1,980 2,429 124 100 0.61 0.93
Spain & Gibraltar 138 169 32 25 0.10 0.26 TOTAL
GROUP TOTAL 6,313 7,012 366 327 0.66 0.82
49 Interim Results for the half year ended 30 June 2007 George Wimpey Group reservations
£m Reservations Ave outlets Per outlet / per week H1 2007 H1 2006 H1 2007 H1 2006 H1 2007 H1 2006 UK private 6,520 6,693 269 286 0.93 0.90 UK affordable 899 594 UK TOTAL 7,419 7,287
US TOTAL 1,218 2,075 117 102 0.66 0.77
GROUP TOTAL 8,637 9,362 386 388 0.85 0.87
50 Interim Results for the half year ended 30 June 2007 UK Housing Revenue analysis
Taylor Woodrow George Wimpey H1 2007 H1 2006 H1 2007 H1 2006 Private volume 2,799 2,914 5,040 5,138 ASP £000s 224 207 190 187 revenue £m 627 603 956 962
Affordable volume 579 455 788 716 ASP £000s 116 105 109 92 revenue £m 67 48 85 66
Lots and other revenue £m 58 62 13
TOTAL volume 3,378 3,369 5,828 5,854 ASP £000s 205 193 178.6 175.5 revenue £m 752 713 1,042 1,031
51 Interim Results for the half year ended 30 June 2007 UK Housing Margin analysis
Taylor Woodrow George Wimpey £m H1 2007 H1 2006 H1 2007 H1 2006 Consolidated revenue 751.5 713.3 1,041.8 1,030.4 Share of JV revenue 28.8 28.9 31.1 14.9 780.3 742.2 1,072.9 1,045.3 Operating profit excluding JVs 96.7 77.3 158.5 114.9 Margin 12.9% 10.8% 15.2% 11.2% Share of JV operating profit 6.3 4.7 5.3 1.1 Profit from operations before 103.0 82.0 163.8 116.0 JV interest and tax Margin 13.2% 11.0% 15.3% 11.1% JV interest and tax (2.1) (1.7) (1.7) (1.6) Profit from operations before 100.9 80.3 162.1 114.4 exceptionals Margin 13.4% 11.3% 15.5% 11.1%
52 Interim Results for the half year ended 30 June 2007 UK Housing Private development product mix
Taylor Woodrow* George Wimpey Completions % H1 2007 H1 2006 H1 2007 H1 2006 Apartments 40% 42% 40% 40% 1 / 2 / 3 bed houses 37% 36% 29% 31% 4 / 5 bed houses 23% 22% 31% 29%
100% 100% 100% 100%
* Private and affordable
53 Interim Results for the half year ended 30 June 2007 UK Housing Private development activity analysis
Taylor Woodrow* George Wimpey H1 2007 H1 2006 H1 2007 H1 2006 Ave house size sq ft 971 968 951 971 ASP £ / sq ft 212 200 199 193
* Private and affordable
54 Interim Results for the half year ended 30 June 2007 UK Housing Private development price mix
Taylor Woodrow* George Wimpey Completions % H1 2007 H1 2006 H1 2007 H1 2006 £51 - 100k 9% 11% 3% 5% £101 - 150k 20% 25% 28% 33% £151 - 200k 33% 28% 34% 31% £201 – 250k 18% 19% 19% 16% £251 – 300k 11% 8% 8% 8% £301 – 500k 8% 8% 7% 6% £500k + 1% 1% 1% 1%
TOTAL 100% 100% 100% 100%
* Private and affordable
55 Interim Results for the half year ended 30 June 2007 UK Housing Taylor Woodrow private and affordable development geographic mix
H1 2007 H1 2006 H2 2006 Legals Size ASP Legals Size ASP Legals Size ASP sq ft £000 sq ft £000 sq ft £000 North 1,258 1,103 205 1,265 1,101 202 1,885 1,034 189 Midlands 965 899 189 1,044 915 180 1,505 879 183 South 1,155 886 219 1,060 860 196 1,535 890 206
TOTAL 3,378 971 205 3,369 968 193 4,925 942 192
56 Interim Results for the half year ended 30 June 2007 UK Housing George Wimpey private development geographic mix
H1 2007 H1 2006 H2 2006 Legals Size ASP Legals Size ASP Legals Size ASP sq ft £000 sq ft £000 sq ft £000 North 1,888 992 166.7 1,694 1,059 167.9 2,269 1,006 167.8 Midlands 1,422 1,003 189.1 1,547 939 168.7 1,984 1,000 179.8 South 1,603 915 228.0 1,775 950 226.6 2,282 929 229.0 City 127 722 171.8 122 754 184.5 309 707 160.2
TOTAL 5,040 951 189.6 5,138 971 187.2 6,844 941 185.8
57 Interim Results for the half year ended 30 June 2007 UK Housing Taylor Woodrow landbank by region
Owned and Strategic acres controlled plots June 2007 June 2006 June 2007 June 2006 North 14,090 14,838 5,500 7,000 Midlands 9,293 9,950 6,800 6,000 South 10,748 13,710 3,400 4,800
TOTAL 34,131 38,498 15,700 17,800
58 Interim Results for the half year ended 30 June 2007 UK Housing George Wimpey landbank by region
Owned and Strategic acres controlled plots June 2007 June 2006 June 2007 June 2006 North 15,854 16,270 5,240 4,983 Midlands 20,889 17,396 4,780 4,532 South 21,898 18,718 4,306 4,250 City 1,632 2,133 G2 344 - TOTAL 60,617 54,517 14,326 13,765
59 Interim Results for the half year ended 30 June 2007 UK Housing Short term land (private and affordable)
Taylor Woodrow George Wimpey OWNED H1 2007 H1 2006 H1 2007 H1 2006 Start of period 30,038 30,605 43,251 39,441 Net acquired 4,130 6,501 5,199 8,101 Legal completions (4,038) (4,231) (5,828) (5,854) End of period 30,130 32,875 42,622 41,688
CONTROLLED 4,001 5,623 17,995 12,829
TOTAL LANDBANK 34,131 38,498 60,617 54,517
60 Interim Results for the half year ended 30 June 2007 UK Housing Taylor Woodrow owned land (private and affordable)
H1 2007 H1 2006 Short term Plots Cost per Value Plots Cost per Value plot £k £m plot £k £m Opening landbank 30,038 38 1,140 30,605 37 1,141 Additions 4,130 59 243 6,501 43 277 Completions (4,038) 42 (169) (4,231) 48 (204) End of period 30,130 40 1,214 32,875 37 1,214
Strategic Acres Potential Acres Potential Plots Plots End of period 15,700 79,000 17,800 78,000
61 Interim Results for the half year ended 30 June 2007 UK Housing George Wimpey owned land (private and affordable)
H1 2007 H1 2006 Short term Plots Cost per Value Plots Cost per Value plot £k £m plot £k £m Opening landbank 43,251 47 2,044 39,441 47 1,833 Additions 5,199 62 322 8,101 44 355 Completions (5,828) (49) (283) (5,854) (50) (293) End of period 42,622 49 2,083 41,688 46 1,895
Strategic Acres Value Acres Value £m £m End of period 14,326 82 13,765 61
62 Interim Results for the half year ended 30 June 2007 North America Housing Impact of dollar
H1 2007 H1 2006 Change Morrison Homes $m revenue 450.9 655.5 (31)% Taylor Woodrow $m revenue * 702.9 808.5 (13)% Morrison Homes $m op profit 16.0 125.3 (87)% Taylor Woodrow $m op profit ** 92.3 173.8 (47)%
Morrison Ave exchange rate 1.98 1.79 Taylor Woodrow Ave exchange rate 1.99 1.81
Morrison Homes £m revenue 228.2 366.2 (38)% Taylor Woodrow £m revenue * 353.2 446.7 (21)% Morrison Homes £m op profit 8.1 70.0 (88)% Taylor Woodrow £m op profit ** 46.4 96.0 (52)%
* Revenue includes joint ventures ** Operating profit is profit from operations before JV interest and taxes
63 Interim Results for the half year ended 30 June 2007 North America Housing Pro forma financial summary †
H1 2007 H1 2006 Change % Average outlets/active sites 241.5 202.2 19 Legal completions - total 2,919 3,480 (13) Ave selling price – total £ 186,000 210,800 (12) Revenue £m 570.7 798.8 (29)
Operating profit* £m 54.0 165.7 (67) Operating margin* % 9.5 20.7 (11.2)ppt
Order book £m 657.6 1,253.9 (48)
† Basis of preparation of pro forma information is detailed on slide 3 * Before exceptional items and including share of joint venture profits after interest and tax
64 Interim Results for the half year ended 30 June 2007 North America Housing Revenue analysis
Taylor Woodrow Morrison Homes H1 2007 H1 2006 H1 2007 H1 2006 Home completions 1,376 1,512 1,543 1,968 ASP $000s 455 440 292 333 Homes revenue $m 626.5 664.8 450.9 655
Lot completions 354 1,463 --
Total revenue $m 702.9 808.5 450.9 655
65 Interim Results for the half year ended 30 June 2007 North America Housing Margin analysis
Taylor Woodrow Morrison Homes £m H1 2007 H1 2006 H1 2007 H1 2006 Consolidated revenue 342.5 432.6 228.2 366.2 Share of JV revenue 10.7 14.1 -- 353.2 446.7 228.2 366.2 Operating profit excluding JVs 37.9 89.7 8.1 70.0 Margin 11.1% 20.7% 3.5% 19.1% Share of JV operating profit 8.5 6.3 -- Profit from operations before 46.4 96.0 8.1 70.0 JV interest and tax Margin 13.1% 21.5% 3.5% 19.1% JV interest and tax (0.5) (0.3) -- Profit from operations before 45.9 95.7 8.1 70.0 exceptionals Margin 13.4% 22.1% 3.5% 19.1%
66 Interim Results for the half year ended 30 June 2007 North America Housing Activity analysis
Taylor Woodrow Morrison Homes H1 2007 H1 2006 H1 2007 H1 2006 Ave house size sq ft 2,277 2,266 2,239 2,423 ASP $ / sq ft 200.0 194.1 131.8 137.5
67 Interim Results for the half year ended 30 June 2007 North America Housing Taylor Woodrow price mix
H1 2007 H1 2006 Completions % Completions % $0 – 150k 21 1% 39 3% $151 – 250k 371 27% 443 29% $251 – 500k 578 42% 584 39% $501 – 750k 237 17% 250 16% $751 – 1,000k 104 8% 154 10% $1,001 – 1,500k 46 3% 17 1% $1,500k + 19 2% 25 2%
TOTAL 1,376 100% 1,512 100%
68 Interim Results for the half year ended 30 June 2007 North America Housing Morrison Homes price mix
H1 2007 H1 2006 Completions % Completions % $0 – 200k 328 21% 307 16% $201 – 250k 292 19% 215 11% $251 – 300k 279 18% 243 12% $301 – 350k 240 16% 382 19% $351 – 400k 178 12% 325 17% $401 – 450k 100 6% 226 11% $451 – 500k 73 5% 122 6% $500k + 53 3% 148 8%
TOTAL 1,543 100% 1,968 100%
69 Interim Results for the half year ended 30 June 2007 North America Housing Geographic mix
Taylor Woodrow* Morrison Homes Completions H1 2007 H1 2006 H1 2007 H1 2006 West 142 230 284 384 Southeast 357 365 589 790 Southwest 348 535 670 794 Canada 529 382 - - TOTAL 1,376 1,512 1,543 1,968
Average selling price $000 West 688 841 379 422 Southeast 715 583 302 365 Southwest 285 281 247 259 Canada 330 283 - - TOTAL 455 440 292 333
* For Taylor Woodrow West includes California, Southeast includes Florida and Texas and Southwest includes Arizona
70 Interim Results for the half year ended 30 June 2007 North America Housing Short term land
Taylor Woodrow Morrison Homes Owned and options H1 2007 H1 2006 H1 2007 H1 2006 Start of period 19,905 18,323 18,099 20,812 Additions 2,028 5,380 256 1,292 Legal completions (1,730) (2,975) (1,543) (1,968) End of period 20,203 20,728 16,812 20,136 Controlled End of period 9,249 15,308 432 3,539
TOTAL LANDBANK 29,452 36,036 17,244 23,675
LAND SPEND $m 113.4 423.5 40 156
71 Interim Results for the half year ended 30 June 2007 Spain and Gibraltar Housing Short term land
H1 2007 H1 2006 Change % FY 2006 Landbank plots 2,388 2,238 6.7 2,482
Landbank years 7.7 6.0 28.3 6.5
72 Interim Results for the half year ended 30 June 2007 73