Annual Report and Accounts 2011

Spain Housing

Despite the ongoing economic weakness in Spain, we have delivered a return to operating profit for the year and achieved an excellent customer satisfaction rating.
Javier Ballester
Managing Director, Spain

  2011 2010
Order book volume as a percentage of completions 46.8% 36.8%
Owned and controlled plots with planning 1,668 1,783
Customer satisfaction 100% 92%
Health and safety (Spain)* 749 1,807
  • *Please note that the injury frequency rate for Spain equates to just two incidents in 2011 and three incidents in 2010.

Performance

As previously reported, we completed our exit from our Gibraltar business in 2010, with no home completions from this market in 2011.

Market conditions remained tough throughout 2011, with mortgage availability remaining restricted. This was of greater significance for local purchasers, as overseas purchasers looking to buy a second home typically require lower levels of mortgage finance.

We completed 109 homes in Spain in 2011 (2010: 136) at an average selling price of £238k (2010: £214k). The increase in our average selling price reflects the exit from the Gibraltar market, where our final completions had been lower priced apartments.

Revenue in 2011 was £28.6 million (2010: £31.1 million), primarily driven by the reduced number of completions. However, despite the tough market conditions, we delivered an operating profit* of £0.2 million, in comparison to an operating loss* of £3.6 million in 2010.

We remain very cautious in our approach to new land purchases and have reduced the number of plots in our land portfolio further in 2011 to 1,668 (2010: 1,783). The Spanish business made a positive contribution to the cash flows of the Group in 2011.

Our year end order book was £10.4 million (2010: £10.8 million).

In addition to the improved financial performance during the year, we delivered improvements in both customer satisfaction and our health and safety performance.

  • *Profit on ordinary activities from continuing operations before finance costs and exceptional items, after share of results of joint ventures.

Current trading

Given the ongoing economic uncertainty in Spain and the wider Euro zone, we expect 2012 to be another year of challenging market conditions. However, 2011 saw an increase in the number of tourists visiting Spain and this has the potential to benefit second home sales.

Key market drivers

  • Continuing oversupply of properties on mainland Spain
  • Ongoing restrictions on mortgage availability
  • Economic uncertainty resulting in reduced consumer confidence
  • Increased number of tourists visiting Spain in 2011
Image of Los Altos del Golf, Camp de Mar, Mallorca

Los Altos del Golf, Camp de Mar, Mallorca

© Taylor Wimpey plc 2012