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23 September 2004
This trading update is provided ahead of the Group’s financial year end 30 September 2004.
The housing markets in which the Group operates have weakened during the summer months on the back of five successive increases in interest rates and consequential dampening of consumer confidence. Whilst this has been particularly the case in respect of homes above £300,000, we have begun to experience a slowing down in market conditions for some lower priced homes, particularly in London and the South East. Potential purchasers are taking longer to commit themselves and are increasingly seeking to negotiate harder terms before proceeding to purchase. In addition, construction delays have been experienced on a handful of projects.
As a consequence the Group now expects to complete the sale of just under 950 homes during the period. The margins on a number of sites have also suffered on the back of the slower housing market.
The Group had anticipated completing a number of land sales during the second half of its current financial year. Some of the sales envisaged have been affected by planning and technical delays. The Directors also believe some buyers have tried to take advantage of the Group’s approaching year end and recent announcement of a bid approach from management. The Directors do not consider it in the shareholders’ interests to sell land at discounted rates. As a consequence the Group now expects to complete the sale of less land by the year end than had been envisaged.
Although the Group hopes to complete a number of significant transactions during the remainder of the month, the culmination of the above trading movements means that the Group’s profits will now fall well below those achieved last financial year.
The Board believes that despite these disappointments the Group’s sizeable and valuable land holdings and its skills base mean that it is well positioned for the future.
The Group will issue a further trading update soon after the year end to reflect actual transactions concluded.
On 2 September the Board announced that it had received a preliminary approach led by the Chairman of the Group, Alan Cherry, with the support of the executive management, which might lead to a cash offer being made for the Company. The executive directors involved continue to make progress with their initiative. As stated previously there is no certainty that any offer will be made.
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Information correct as at 23/09/2004