Wilson Bowden: trading statement

7:34 a.m. Thu 22 Dec 2005

Wilson Bowden said trading in the second half of the year (to December 2005) was an improvement from the extremely poor trading conditions in the first half.

After a weak summer season, reservations improved in the autumn. The company says it volumes reached 2800 in H2, compared to 2,317 in H1. Margins in the second half of the year are also better than in the first half. Changes in sales mix have ensured higher average selling prices in H2.

The average number of selling sites for the full year rose 16% to 136. A further increase of around 5% in the number of sites is expected next year. The company has noted an increase in the number of reservations per site (and a drop in cancellations) during the last 11 weeks.

The company admits that it is too early to call the direction of the housing market in 2006 but seems hopeful that the improvement seen in H2 will continue. We tend to be less optimistic.

The share trades at 1390p, on a prospective PE (2006 earnings) of 8x, at the upper end of the sector range with a yield of 3.2%.