1 george wimpey plc preliminary results for the year ended 31 december 2006 21 february 2007

1

George Wimpey PlcPreliminary Results

for the year ended 31 December 2006

21 February 2007

Preliminary Results for year ended 31 December 2006 2

Disclaimer

This presentation is not intended, and does not, constitute or form part of, any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in George Wimpey Plc or any other invitation or inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

Past performance cannot be relied upon as a guide to future performance.

Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements.

3

WelcomeJohn Robinson (Chairman)


Agenda

• Introduction Peter Redfern

• Financial review Andrew Carr-Locke

• US housing review Steve Parker

• UK housing review Peter Redfern

• Outlook and strategy Peter Redfern

• Questions and answers

5

IntroductionPeter Redfern (Group Chief Executive)


Group performance 2006Highlights

• Group profit before tax and pre-exceptional items at £370.9 million

• Group volumes at an all time high of 17,963

• 14% growth in UK profits delivered

• UK margins improved and progress plan accelerated

• Cost savings of £25m and $20m targeted for 2007

• Cash flow of £434m generated before growth land investment, tax and returns to investors

• Strong balance sheet as gearing reduced to 23%

• New skills and strengths added across the Group


Taking the business forwardClear strategic priorities

• Leadership– UK Ian Sutcliffe, Managing Director George Wimpey UK

• Land– UK Paul Churchouse, Head of Land Development– UK Head of Planning appointed, starts April

• Cost– US Lou Steffens, Senior VP Florida Region– UK Peter Williams, Head of Procurement

• Sales and marketing– Graham Hughes transferred to US from UK– US Sheryl Palmer, Senior VP West Region

8

2006 financial reviewAndrew Carr-Locke (Group Finance Director)


2006Full year results

£m 2006before

exceptional items

2006exceptional

items

2006total

2005total

Change

Revenue 3,147.4 - 3,147.4 3,003.2 + 5%

Operating profit 422.8 (60.7) 362.1 437.5 - 17%

Interest (51.9) - (51.9) (71.0) - 27%

Profit before tax 370.9 (60.7) 310.2 366.5 - 15%

Tax (114.9) 22.7 (92.2) (113.7)

EPS 64.4 (9.6) 54.8 64.3

NAV per share 426p 389p


2006Full year results

£m 2006 2005 Change

Revenue 3,147.4 3,003.2 + 5%

Operating profit 422.8 437.5 - 3%

Interest (51.9) (71.0) - 27%

Profit before tax 370.9 366.5 + 1%

Tax 30% 31%

EPS 64.4 64.3

NAV per share 426p 389p

DPS 19.4p 17.6p

ROACE 20.3 22.3

Note: EPS, ROACE, operating profit and profit before tax are all shown before exceptional items


Segmental analysisFull year 2006

Turnover Operating profit* Operating margin**

£m Change £m Change 2006 2005

UK 2,391.2 + 11% 317.6 + 14% 13.0% 12.9%

US 756.2 - 11% 116.9 - 31% 15.5% 20.0%

Corporate - (11.7)

TOTAL 3,147.4 + 5% 422.8 - 3%

* Before exceptional items

** Operating margin before JVs and exceptional items

Exchange rate in 2006 £:1.84$ 2005 £:1.82$


CompletionsFull year 2006

Completions Ave selling price

No Change £ / $ Change

UK private 11,982 + 12% 186.4 - 1%

UK affordable 1,634 + 15% 94.9 - 4%

UK total 13,616 + 13% 175.4 - 2%

US 4,347 - 12% 319.6 + 1%

GROUP TOTAL 17,963 + 6%


Interest charge

£m 2006 2005 Change

Loans 43.9 50.0 - 12%

Pensions 6.8 8.5 - 20%

Derivatives (5.6) 5.3

Other 6.8 7.2 - 6%

TOTAL 51.9 71.0 - 27%


US land write-downsBreakdown

$m £m

Land write-downs 104.9 53.6

Options write-off 13.8 7.1

Exceptional earnings pre-tax charge 118.7 60.7

Less deferred tax (44.4) (22.7)

Exceptional earnings post-tax charge 74.3 38.0

EPS impact 9.6p

• Write-down reflects selling price reduction needed to provide a normal sales rate calculated on a prudent basis


US land write-downsIndustry comparisons

Land write-downand options write-off $m

Land stocks (years)

Morrison Homes 118.7 3.5

Centex 590.8 6.4

DR Horton 334.0 6.1

Hovnanian 332.9 5.3

KB Homes 414.6 5.1

Lennar 570.9 6.8

Pulte 505.0 6.6

Ryland 80.7 4.1

Standard Pacific 73.7 6.0

Toll Brothers 138.9 8.6

Credit Suisse estimates/company’s own reports – 2006 year end


Balance sheet

£m 31 Dec 2006 31 Dec 2005

Fixed assets and joint ventures 71.8 57.6

Land 2,339.9 2,153.4

Deferred terms (607.3) (380.5)

Other net operating assets 497.2 469.9

Tax and provisions (90.6) (104.9)

Net pension deficit (116.8) (129.2)

TOTAL CAPITAL EMPLOYED 2,094.2 2,066.3


Balance sheetFinancing

31 Dec 2006 31 Dec 2005

Shareholders’ funds £m 1,707.1 1,544.4

Net debt £m 387.1 521.9

Capital employed £m 2,094.2 2,066.3

Gearing 23% 34%

Interest cover last 12 months 7.0x 6.2x

Cash interest cover last 12 months 8.3x 8.8x


Cash flow summary

£m 2006 2005

Operating profit 362.1 437.5

Land realisations 896.6 737.4

Replacement land spend (781.1) (762.7)

Other working capital movements (43.2) (49.0)

Cash inflow before growth 434.4 363.2

Growth land spend (129.3) (76.3)

Cash inflow from operations 305.1 286.9

Interest / tax (151.4) (171.3)

Dividends (58.2) (53.7)

Exchange rate / other 39.3 (62.9)

Decrease (increase) in net debt 134.8 (1.0)


Financial summaryFull year 2006

• Group profit before tax* £370.9 m + 1%

• UK operating profit** £317.6 m + 14%

• US operating profit* $214.7 m - 30%

• ROACE last 12 months* 20.3% (2005: 22.3%)

• Gearing 23% (2005: 34%)

• Shareholders’ funds £1,707.1 m + 11%

• Dividend 19.4p + 10%

* Before exceptional items

** Operating profit including JVs

20

US housing reviewSteve Parker (President, Morrison Homes)


US housingFinancial summary

2006 2005 Change 2004

Legal completions 4,347 4,921 - 12% 4,422

Ave selling price $319,600 $312,700 + 2% $288,900

Revenue $m 1,389.1 1,538.8 - 10% 1,277.3

Operating profit $m 214.7 308.3 - 30% 188.3

Operating margin 15.5% 20.0% - 4.5pp 14.7%


• 2006 started with soft market conditions, steadily worsened through to Q4

• Tough market conditions caused by– increased interest rates– affordability– investors cancelling homes under contract– overstocking of inventory– incentives/discounting by US competitors

• Consistently weak across Arizona, Florida and Northern California

US housing2006 market conditions


Short term market conditions Total US stock position

Dec 2006 June 2006 Dec 2005 June 2005

Existing homes 3.5 m 3.7 m 2.8 m 2.7 m

Months’ supply 6.8 6.8 5.1 4.3

New homes 0.54 m 0.57 m 0.48 m 0.50 m

Months’ supply 5.9 6.1 4.8 4.2

Source: NAR/US Census Bureau

• New homes includes homes completed, under construction and not yet started


US housingIndustry comparisons 2006

Company PBIT margins ROACE Land stocks (years)

Morrison Homes 15.5% 24.6% 3.5

Centex 11.7% 11.6% 6.4

DR Horton 14.6% 12.9% 6.1

Hovnanian 5.4% 5.3% 5.3

KB Homes 13.8% 15.8% 5.1

Lennar 14.2% 18.4% 6.8

Pulte 12.7% 13.7% 6.6

Ryland 14.9% 19.4% 4.1

Standard Pacific 17.2% 11.8% 6.0

Toll Brothers 20.4% 14.9% 8.6

Estimates from Credit Suisse, pre-exceptional figures based on latest full year


US housingTotal landbank

0

5,000

10,000

15,000

20,000

25,000

2001 2002 2003 2004 2005 2006

plo

ts


US housing2007 market conditions

• First 7 weeks show early signs of stabilisation

– steady housing inventory levels– flattening of incentives– cancellation rates back to historical levels– traffic levels higher than 2006– improving press coverage


US housingMorrison sales performance

Week 7

2007

H2

2006

H1

2006 2005 2004

Ave outlets open 115 112 102 95 100

Ave sales rate 0.66 0.36 0.77 1.05 0.93

Ave sales price 301 308 333 313 289

Ave cancellation rate 20% 52% 26% 15% 14%

No. in order book 1,018 754 2,075 1,995 1,705


US housingAverage weekly sales rates

0

0.2

0.4

0.6

0.8

1

1.2

H12002

H22002

H12003

H22003

H12004

H22004

H12005

H22005

H12006

H22006

YTD2007

sale

s pe

r si

te p

er

we

ek


US housingPerformance initiatives

• Land– renegotiation of existing land contracts– land buying process

• $20 million targeted cost savings– 5% initial reduction in build costs– initiatives across all areas of the business– outsource second year warranty programme

• Overhead reductions – 20% across the business– ‘right-sizing the business’

• Sales– clear strategy – focus on opening outlets on time– achieve and maintain a consistent sales rate– re-build backlog levels


US housingSummary

• Early 2007 shows signs of market stability

• Order book low coming into 2007

• Firm actions taken in 2006

• 2007 challenging year– focus on driving sales volume in H2 to build the backlog

• We believe we are well placed for 2008

31

UK housing review Peter Redfern (Group Chief Executive)


UK housing Financial summary

2006 2005 Change

Legal completions – total 13,616 12,100 + 13%

Private 11,982 10,678 + 12%

Affordable 1,634 1,422 + 15%

Ave selling price – total £175,400 £178,000 - 1%

Private £186,400 £188,600 - 1%

Affordable £94,900 £98,600 - 4%

Revenue £m 2,391.2 2,157.6 + 11%

Operating profit £m 317.6 278.0 + 14%

Operating margin* 13.0% 12.9% + 0.1pp

*Excluding JV results


UK housing Delivery on promises

H1 2006 low point of margin Gross margin in H2 2.2% ahead

Better H1/2 balancing H1 2006 compared to H1 2005 over 25% improvement

Impact of strong order book Real benefits of stronger negotiating position delivered in H2 2006

Develop our good cost saving performance Significant savings underpinned margins in 2006. New target for 2007

Deal with underperforming businesses The 6 lowest performing businesses in 2005 have increased margins by over 4%


UK housingMarket conditions

• Market stable throughout period– total market volumes improved on slow 2005

– second hand market quite strong

– buyer confidence solid

• George Wimpey underlying house price movement was 3 – 4%

• Continuing imbalance between supply and demand is supporting market

• Affordability remains constrained, but limited impact from interest rate rises


UK housingGeorge Wimpey sales performance

FY 2006 FY 2005 FY 2004

Ave outlets open 275 307 295

Ave sales rate 0.85 0.71 0.69

Ave sales price (private) 189.5 190.9 193.8

No. in order book (private) 3,288 3,045 2,421

• Record 2007 opening order book gives great platform

• Open outlets remain as main target area for improvement


UK housing Spotlight on cost

• Cost management has always been a strength of the business

• Ian Sutcliffe has brought a new professional focus and structure to this– specific targets set for key elements

– over 80 cost reduction initiatives underway or identified to activate

– new national Head of Procurement identifying significant savings

• Sales and marketing costs are a key target– 2007 target to reduce by over £12m

– driven by national/regional media and advertising production buying

– driven by savings in show homes and sales benchmarking

• Construction costs remains an area of focus– specification and design savings key

– national preferred house type range now in effect with 3,000 homes under construction


UK housing Spotlight on cost

£000 2006 2005 2004 2003

Build cost as a % of revenue

51.4% 52.0% 50.1% 51.7%

Build cost per plot £90.2 £92.8 £93.2 £90.3

Build cost per sq ft £97.5 £95.7 £91.9 £99.3

£/per sq ft

2005 cost 95.7

Estimated impact of mix changes 0.9

Impact of estimated 3.5% cost inflation 3.4

Savings in construction costs (2.5)

2006 cost 97.5

Impact of £2.50 per sq ft saving equates to circa £35m pa


UK housing Strengthened land position

Owned and controlled land Strategic acres

2006 2005 2006 2005

North 15,637 15,137 6,880 5,112

Midlands 19,126 13,466 4,508 4,662

South 21,213 19,027 4,458 4,395

City 1,779 3,355

G2 244 -

TOTAL 57,999 50,985 15,846 14,169

• 14% growth in owned and controlled plots

• All 2007 expected completions have planning


UK housing Source of short term owned and controlled landbank

Optimum mix

• 40% short term

• 30% medium term

• 30% long term

0

10000

20000

30000

40000

50000

60000

Dec 04 Dec 05 Jun 06 Dec 06

plot

s

Short term land Medium term land Long term land


UK housing Strengthened owned land position

Cost per plot (000) 2006 2005

Opening landbank £46.5 £45.4

Acquired £50.4 £49.8

Completions (£49.1) (£47.1)

Closing landbank £47.3 £46.5

Land value % ASP 25.3% 26.0%

• Plot cost in landbank below that on completions

• Shift in landbank mix will start to come through in 2007


UK housing Margin commitments firmed up

H2

2006

H1

2006

H2

2005

H1

2005

Gross margin % 21.5 19.3 20.3 23.5

• Commitment to improvement from H1 2006 ‘low point’ delivered

• Clear statement of future operating margin targets:

– 14% in 2007

– ongoing growth to 16% over 2-3 years

– longer term target of 18%


UK housingOutlook

• All plots for 2007 have planning

• Cost savings offsetting build inflation

• Market conditions remain stable

• Very strong order book – over 40% of full year completions sold

• Margins in order book are ahead of H2 2006 completions

43

Group outlook and strategyPeter Redfern (Group Chief Executive)


Group strategy update

• Stated our objectives in July 2007– to become the leading housebuilder in the UK

– to achieve top 3 positions in the high growth markets of the US

• In all of our businesses we believe these results are best achieved by focusing on the basics of a housebuilding business

– land

– continuous cost reduction

– customers and sales processes

– people

• Growth and financial results automatically follow where we get these basics right

• Significant step changes in 2006 over previous years


Group strategy US strategy update

• In difficult markets we have re-examined our strategy, and believe that it holds good

• The US homebuilding markets in growth states retain their capacity to deliver exceptional profits over time

• We have reduced our total risk exposure without damaging the long term capacity of the business

• We have enhanced the competitive position of Morrison– landbank value protected

– exceptional people recruited

– cost management approach upgraded significantly

– sales processes reviewed and strengthened


George Wimpey PlcOutlook

• UK market stable, some interest rate risk, but currently robust

• Strong forward position in the UK– order book

– landbank

– 2007 planning

• Commitment to exceed 14% UK operating margin in 2007

• 2007 expected to remain tough on bottom line in the US– weak order book and pressure on prices

• However all signs are of US market stabilising– good chance of recovery towards stronger 2008


George Wimpey PlcForthcoming events

• AGM statement and trading update 26 April 2007

• Pre-close trading update– management dinner 27 June 2007

• Interim results 1 August 2007

• Site visit October 2007

48

George Wimpey PlcPreliminary Results for the year ended 31 December 2006

APPENDIX


George Wimpey PlcUndeveloped land disposals

£m 2006 2005

Land sales UK 32.2 24.3

US 0.3 13.2

TOTAL 32.5 37.5

Profit UK 17.2 15.4

US 0.3 1.6

TOTAL 17.5 17.0

Land sales are not included in revenue. Profits on land sales are included in net operating expenses


George Wimpey Plc Group reservations

Reservations Ave outlets Per outlet /

per week

2006 2005 2006 2005 2006 2005

UK private 12,225 11,318 275 307 0.85 0.71

UK affordable 1,624 1,881

UK TOTAL 13,849 13,199

US TOTAL 3,106 5,211 107 95 0.56 1.05

GROUP TOTAL 16,955 18,410 382 402


Impact of dollar

2006 2005 Change

Morrison Homes turnover $m $1,389.1 $1,538.8 - 9.7%

Morrison Homes op profit $m $214.7 $308.3 - 30.4%

Ave exchange rate 1.84 1.82

Morrison Homes turnover £m £756.2 £845.5 - 10.6%

Morrison Homes £ op profit £m £116.9 £169.4 - 31.0%


US housing Turnover analysis

2006 2005

Year H2 H1 Year H2 H1

Volume 4,347 2,379 1,968 4,921 2,925 1,996

ASP $000s 320 309 333 313 320 302

Turnover $m 1,389 734 655 1,539 936 603


US housingMargin analysis

2006 2005


Gross profit $m 373.8 172.4 201.4 454.7 288.2 166.5

Gross margin % 26.9 23.5 30.7 29.2 30.6 27.1

Direct Selling $m (81.4) (44.7) (36.7) (72.8) (41.2) (31.6)

Overhead costs $m (78.3) (38.9) (39.4) (76.4) (40.6) (35.8)

Land profits 0.6 0.6 - 2.8 -

2.8

Operating profit $m 214.7 89.4 125.3 308.3 206.4 101.9

Operating margin % 15.5 12.2 19.1 20.0 22.0 16.9


US housingActivity analysis

2006 2005


Ave house size sq ft 2,274 2,151 2,423 2,299 2,263 2,355

ASP $ / sq ft 138.7 139.9 137.5 136.0 141.0 128.2


US housing Price mix

2006 2005

Completions % Year H2 H1 Year H2 H1

$0 – 200k 17 19 16 17 15 19

$201 – 250k 14 17 11 17 14 20

$251 – 300k 14 14 12 17 18 17

$301 – 350k 18 16 19 16 19 13

$351 - 400k 16 15 17 12 13 11

$401 - 450k 10 10 11 9 9 9

$451 – 500k 6 5 6 6 6 6

$500k + 5 4 8 6 6 5

TOTAL 100 100 100 100 100 100


US housing Geographic mix

2006 2005

Completions Year H2 H1 Year H2 H1

West 874 490 384 1,187 727 460

Southeast 1,638 848 790 2,253 1,321 932

Southwest 1,835 1,041 794 1,481 877 604

TOTAL 4,347 2,379 1,968 4,921 2,925 1,996

Average selling price $000

West 408 396 422 429 430 428

Southeast 349 334 365 300 313 282

Southwest 251 246 259 239 240 237

TOTAL 320 309 333 313 320 302


US housingRegional performance

Turnover Operating profit Operating margin

2006

$m

2005

$m

2006

$m

2005

$m

2006

%

2005

%

West 356 510 42.9 139.7 12.1 27.0

Southeast 572 675 111.1 141.3 19.4 20.7

Southwest 461 354 77.1 51.0 16.7 14.0

Corporate - - (16.4) (23.7) - -

TOTAL 1,389 1,539 214.7 308.3 15.5 20.0


US housing Short term land

2006 2005

Owned and optioned Year H2 H1 Year H2 H1

Start of period 20,812 20,136 20,812 18,892 19,661 18,892

Additions 1,634 342 1,292 6,841 4,076 2,765

Legal completions (4,347) (2,379) (1,968) (4,921) (2,925) (1,996)

End of period 18,099 18,099 20,136 20,812 20,812 19,661

Controlled

End of period 638 638 3,539 2,702 2,702 3,058

TOTAL LANDBANK 18,737 18,737 23,675 23,514 23,514 22,719

LAND SPEND $m 284 128 156 303 152 151


US housing Landbank by region

2006 2005

West 3,047 4,093

Southeast 9,459 11,989

Southwest 6,231 7,432

TOTAL 18,737 23,514


UK housing Turnover analysis

2006 2005


Private volume 11,982 6,844 5,138 10,678 6,524 4,154

ASP £000 186.4 185.7 187.2 188.6 184.8 194.5

turnover £m 2,233 1,271 962 2,014 1,206 808

Affordable volume 1,634 918 716 1,422 1,000 422

ASP £000 94.9 97.3 91.7 98.6 103.3 87.7

turnover £m 155 89 66 140 103 37

Other turnover £m 3 - 3 4 2 2

TOTAL volume 13,616 7,762 5,854 12,100 7,524 4,576

ASP £000 175.4 175.4 175.5 178.0 174.0 184.6

turnover £m 2,391 1,360 1,031 2,158 1,311 847


UK housing Margin analysis

2006 2005


Gross profit £m 492.1 293.0 199.1 464.2 265.6 198.6

Gross margin % 20.6% 21.5% 19.3% 21.5% 20.3% 23.5%

Direct Selling £m (85.8) (42.8) (43.0) (86.2) (45.7) (40.5)

Overhead costs (113.5) (61.7) (51.8) (114.6) (58.3) (56.3)

Land profits 17.2 6.6 10.6 15.4 9.8 5.6

Operating profit £m 310.0 195.1 114.9 278.8 171.4 107.4

Operating margin* % 13.0% 14.3% 11.2% 12.9% 13.1% 12.7%

JV results 7.6 8.1 (0.5) (0.8) (0.1) (0.7)

Profit before interest 317.6 203.2 114.4 278.0 171.3 106.7

* Operating margin excludes JV results


UK housing Private development product mix

2006 2005


Apartments 41% 42% 40% 36% 37% 34%

1 / 2 / 3 bed houses 29% 28% 31% 32% 32% 32%

4 / 5 bed houses 30% 30% 29% 32% 31% 34%

TOTAL 100% 100% 100% 100% 100% 100%


UK housing Private development activity analysis

2006 2005


Average house size sq ft 954 941 971 994 980 1,015

Average selling price (£/sq ft) 195 198 193 190 189 192


UK housing Private development price mix

2006 2005


£51 – 100k 4 4 5 6 7 4

£101 – 150k 30 28 33 30 31 30

£151 – 200k 32 33 31 32 32 32

£201 – 250k 18 19 16 18 17 19

£251 – 300k 8 8 8 7 6 8

£301 – 500k 7 7 6 6 6 6

£500k + 1 1 1 1 1 1

TOTAL 100 100 100 100 100 100


UK housing Private development geographic mix

2006 2005

Legals Size sq ft

ASP £000

Legals Size sq ft

ASP £000

North 3,963 1,029 167.9 3,813 1,043 167.0

Midlands 3,531 973 174.9 3,079 965 170.2

South 4,057 938 227.9 3,599 989 225.6

City 152 731 172.5 134 802 273.9

TOTAL 11,703 977 190.9 10,625 999 189.1

Joint Ventures 279 - - 53 - -

TOTAL 11,982 954 186.4 10,678 994 188.6


UK housingPrivate development average weekly sales rates

0

0.2

0.4

0.6

0.8

1

1.2

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2003 2004 2005 2006


UK housing Private development net sales prices on reservations

165

170

175

180

185

190

195

200

205

210

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

AS

P £

000

2003 2004 2005 2006


UK housing Short term land (private and affordable)

2006 2005

OWNED Year H2 H1 Year H2 H1

Start of period 39,441 41,688 39,441 37,222 39,784 37,222

Net acquired 17,426 9,325 8,101 14,319 7,181 7,138

Completions (13,616) (7,762) (5,854) (12,100) (7,524) (4,576)

End of period 43,251 43,251 41,688 39,441 39,441 39,784

CONTROLLED 14,748 14,748 12,829 11,544 11,544 14,596

TOTAL LANDBANK 57,999 57,999 54,517 50,985 50,985 54,380


UK housing Owned land (private and affordable)

2006 2005

Short term Plots Cost per

plot £k

Value

£m

Plots Cost per

plot £k

Value

£m

Opening landbank 39,441 46.5 1,833 37,222 45.4 1,690

Net acquired 17,426 50.4 879 14,319 49.8 712

Completions (13,616) 49.1 (668) (12,100) 47.1 (569)

End of period 43,251 47.3 2,044 39,441 46.5 1,833

Strategic Acres Value £m Acres Value £m

End of period 15,846 81

14,169 71

1 george wimpey plc preliminary results for the year ended 31 december 2006 21 february 2007

Documents

uk operating profit

us operating profit

completionsfull year

highlightsgroup profit

preexceptional items

growth land investment

operating margin

exceptional itemsexchange