Taylor Wimpey, parent company of the U.S-based Taylor Morrison, turned a profit in the first half of the year as did its North American division.
The U.K.-based company posted net earnings of 7.5 million pounds on revenue of 1.2 billion pounds for the first half of the year compared with a loss of 681.9 million pounds in the first half of 2009.
The North American unit, which includes operations in Canada as well as the United States, had an operating profit of 28.2 million pounds ($44.8 million) compared with 18.6 million pounds ($29.6 million) in the same period last year. The earnings were the result of a strong Canadian market and "a return to profitability" in the United States, the company said. Margins were 7.6% for the first half of 2010 compared with 5.2% in the same period of 2009.
In the first half of 2010, Taylor Wimpey closed 1,843 homes in North America, 1,272 of which were in the United States. That compares with 1,922 in the first half of last year with 1,279 in the United States. The smaller number of orders was eclipsed by significantly higher selling prices in Canada. However, home prices in the United States were essentially flat, falling slightly from 173,000 pounds ($275,417) to 172,000 pounds ($273,825).
The company noted that the U.S. market has begun to soften in recent weeks for Taylor Morrison. Yet its backlog for the second half in its North American division is more than 80% of the company's full-year completions.
Taylor Wimpey's community count in North America decreased in the first half of 2010 to 148 compared with 171 in the second half of 2009. Sales per community were down slightly in the United States to 0.41 a week versus 0.46 in the same period last year.
In Canada, however, sales per community jumped to 1.12 per week in each community from 1.
The company has been taking steps to increase the number of sales outlets, adding 2,649 lots in the first half of 2010.
"As activity levels increase in the U.S. land markets, we remain focused on selective deals where we can earn strong returns over the medium term," the company noted in its earnings release.
In other news, Taylor Wimpey noted that Kevin Beeston joined the company's board as a non-executive chairman July 1. He replaced Norman Askew who stepped down. In addition, Rob Rowley joined the board as an independent non-executive director Jan. 1, and David Williams resigned as an independent non-executive director March 31.