Wilson Bowden: 2005 results

6:26 a.m. Fri 03 Mar 2006

Wilson Bowden announced poor figures for the year to December 2005. Revenue declined to £1,230.8m (2004: £1,282.3m) and pre-tax profits (before goodwill impairment) declined 14% to £223.7m.

The number of houses sold declined to 5,027 units (2004: 5,403) and the average selling price fell to £198,200 (2004: £206,000) while build costs increased slightly by 0.9%.

The company has reacted to the slowing market by launching smaller units. The latest, (launched today) has prices starting from £65,000 with sizes ranging from 300-677 square feet. Build has started on two sites and the company hopes to sell 500 units by the end of the year.

The company is hopeful in its outlook but risk averse investors would do well to wait for a firm recovery in houses prices before venturing into the sector.

The share trades at 1486p, on a prospective PE (2006 earnings) of 8.9x, within the sector range but not particularly cheap with a yield of 3%.