1 george wimpey plc interim results for the half year ended 2 july 2006 1 august 2006

1

George Wimpey PlcInterim Results for the half year ended 2 July 2006

1 August 2006

Interim Results for half year ended 2 July 2006 2

Disclaimer

The information in this presentation does not constitute an offer to sell or an invitation to buy shares in George Wimpey Plc or any other invitation or inducement to engage in investment activities

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

3

Welcome and introductionJohn Robinson (Chairman)


Agenda

• Interim highlights / group strategy Peter Redfern

• Half 1 2006 financial review Andrew Carr-Locke

• US housing / UK housing Peter Redfern

• Group outlook Peter Redfern

• Questions and answers

5

Interim highlights and strategyPeter Redfern (Group Chief Executive)


Interim highlights

• Group profit before tax £152.3m + 25%

• Strong first half from Morrison Homes $125.3m PBIT + 23%

• Gearing reduced to 43% from 64% June 2005

• Group completions increased to 7,822 – highest for 25 years

• Group landbank grown to 78,192 plots – strongest ever position

• Lowest UK plot acquisition cost since 2002

• Improving margins in UK order book


Group strategy Objectives

• Focus on residential development in our two key markets– UK where supply demand balance underpins good market– US where demographic growth provides great opportunities

• Objective to be the leading housebuilder in the UK and in each of the regional markets we choose in the US

• Increase emphasis on ways of adding value– medium term margin growth and stability– value adding processes– steady volume growth


US housing Building a leading competitive business

• Existing strengths– positions in five states with excellent medium term prospects– a strong brand in Morrison Homes for quality– a delivery and growth culture – committed management team with a long term view

• Our goals are to – build on our regional positions to create regional leadership– continue to select the right markets for our business– take opportunity from market slow down to build business– increase focus on operating efficiency


UK housingBuilding a leading competitive position

• Existing strengths– large scale presence in most key markets– strong build cost and overhead base– lead position in customer service and build quality– committed management team with long term view

• Our goals are to – change the mix and source of land to reduce our real land cost– capitalise on our scale to become the leader in operating efficiency and

effectiveness– operate with a longer term view

10

H1 financial reviewAndrew Carr-Locke (Group Finance Director)


2006First half results

£m H1 2006 H1 2005 Change

Turnover 1,397 1,169¹ + 19%

Operating profit 178.9 157.2 + 14%

Joint ventures (0.5) (0.7) – 29%

Interest (26.1) (34.2) – 24%

Profit before tax 152.3 122.3 + 25%

Tax 31.5% 31.0%

EPS 26.3p 21.5p + 22%

NAV per share 405p 348p + 17%

DPS 6.3p 5.7p + 10.5%

ROACE* 20.2% 22.7%

*last 12 months

¹restated for change in land sales reporting


Segmental analysisFirst half 2006

Turnover Operating profit Operating margin

£m Change £m Change H1

2006

H1

2005¹

UK 1,031 + 22% 115 + 7% 11.2% 12.7%

US* 366 + 14% 70 + 28% 19.1% 16.9%

Other - (6)

TOTAL 1,397 + 19% 179 + 14%

*exchange rate in 2006 £:$1.79. 2005 £:$1.87

¹restated for change in land sales reporting


CompletionsFirst half 2006

Completions Ave selling price

No Change £ / $ Change

UK private 5,138 + 24% £187,200 – 4%

UK affordable 716 + 70% £91,700 + 5%

UK total 5,854 + 28% £175,500 – 5%

US 1,968 – 1% $333,000 + 10%

GROUP TOTAL 7,822 + 19%


Interest charge

£m H1 2006 H1 2005 Change

Loans 22.3 25.1 – 11%

Pensions 3.9 4.2 – 7%

Derivatives (3.1) 1.3

Other 3.0 3.6 – 17%

TOTAL 26.1 34.2 – 24%


Cash flow summary

£m H1 2006 H1 2005

Operating profit 179 157

Land realisations 389 284

Replacement land spend (353) (294)

Other working capital movements (109) (134)

Cash inflow before growth 106 13

Growth land spend (171) (208)

Cash inflow from operations (65) (195)

Interest / tax (83) (82)

Dividends (46) (41)

Exchange rate / other 18 (42)

Increase in net debt (176) (360)


Balance sheetNet assets

£m 2 July 2006 3 July 2005

Fixed assets and joint ventures 63 45

Land 2,238 2,136

Land creditors (369) (240)

Other net operating assets 585 546

Tax and provisions (92) (94)

Net pension deficit (115) (145)

TOTAL NET ASSETS EMPLOYED 2,310 2,248


Balance sheetFinancing

2 July 2006 3 July 2005

Shareholders’ funds £m 1,612 1,367

Net debt £m 698 881

Capital employed £m 2,310 2,248

Gearing 43% 64%

Interest cover last 12 months 7.3 x 7.1 x

Cash interest cover last 12 months 9.7 x 9.4 x


Financial summaryFirst half 2006

• Group profit before tax £152.3 m + 25%

• UK operating profit £114.9 m + 7%

• US operating profit $125.3 m + 23%

• ROACE - last 12 months 20.2% (2005: 22.7%)

• Gearing 43% (2005: 64%)

• Shareholders’ funds on June 2005 £1,612 m + 18%

• Interim dividend increased from 5.7p to 6.3p + 10.5%

19

US housing Peter Redfern (Group Chief Executive)


US housing Financial summary

H1 2006 H1 2005 Change

Legal completions 1,968 1,996 - 1%

Ave selling price $333,000 $302,000 + 10%

Revenue $m 655.5 602.8 + 9%

Operating profit $m 125.3 101.9 + 23%

Operating margin 19.1% 16.9%

• Completions increased by 3% excluding Atlanta


Short term market conditions Total US stock position

June 2006 June 2005

Existing homes 3.73 m 2.65 m

Months’ supply 6.8 4.3

New homes 0.57 m 0.45 m

Months’ supply 6.1 4.2

Source: NAR / US Census Bureau

• High level of housing stock needs to clear– 41% increase in existing home inventory– 27% increase in new home inventory – 4.5 – 5 months’ supply of new homes is healthy demand / supply balance

• Level varies significantly by region

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


Market conditionsUS 2006

• Market strength affected by – steep price rises mid 2004 to October 2005– media speculation about ‘crash’ – interest rate rises and concerns about future rises– significant reduction in investor sales

• Still a good long term environment – 1.85 m new jobs added since May 2005 + 1.37% – 136.4 m total employment market – 4.6% unemployment - lowest level for 10 years– target of 70% home owners by 2010, 1.28 m new home owners per year


US housing Short term market impact

• Compared with H1 2005– H1 visitor levels down 33% – H1 sales rates down by 33%– H1 net prices down by 2.5%

• A business of two parts– Florida, California, Phoenix slowing

• visitor levels and sales rates well down• significant increase in cancellation rates• incentives increased

– Texas and Denver some strengthening• visitor levels and sales rates well up • incentives still necessary but at normal levels


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

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Managing the slowing market Sales

• Maintaining higher outlet numbers– outlets currently up 19%– driven by 20% increase in first half outlet openings and slower sales rates

• Presenting well structured incentives– reduce up front funding costs– targeted at local market conditions

• Continuous review and strengthening of sales people– new Sales and Marketing Director with extensive industry experience– retraining and refreshing of staff

• Careful management of order book


• Overheads– review of overheads within all businesses – reducing headcount without affecting ability to grow in the future

• Procurement– purchasing function greater accountability for cost reductions– regional purchasing councils introduced– cost savings of 3 - 5% targeted from all suppliers– opportunities learnt from UK business

• Review of product and specification, particularly of lower end product

Managing the slowing market Costs


Managing the slowing market Product and specification

• Affordability in many markets has become stretched– introduced townhomes into Florida in 2004 to address affordability issues

• Essential to stay in the core of the market with the right product

• Increase in higher density product across all divisions– townhomes being considered for Texas / California markets– low rise condominiums being considered for Florida– ‘four pack’ higher density homes introduced in Sacramento

• Products redesigned to reduce costs without affecting appearance and appeal


US housing Cost of land acquired

H1 2006 Landbank

Average plot cost $43,200 $43,500

H1 2006 2005 full yr 2004 full yr 2003 full yr

Cost per plot of land acquired

$59,100 $53,300 $40,900 $37,300

Cost per plot as %

of ASP on completions 17.8% 17.0% 14.2% 13.8%


US housing Objectives

• Medium term aim to become ‘Top 3’ in each of our selected markets by – developing the right relationships– being selective about land – creating longer term land opportunities – having the right products in the right market segments

• Significant opportunity for regional scale - Morrison Homes 19th largest housebuilder in 2005


US housing Going forward

• Remains difficult to predict market outcome for 2006– visitor levels and sales rates below 2005– completions for H2 expected to be below H2 2005– margins and prices starting to reflect changing market conditions– order book for completions in 2006 at week 29

• 16% lower by volume and 13% lower by value

• Morrison business in good shape– strong land bank with good proportion of historical land cost– strong management team in centre and regions– opportunities for advantage from weaker market– focus on new operational efficiencies

31

UK housing Peter Redfern (Group Chief Executive)


UK housing Financial summary

H1 2006 H1 2005 Change

Legal completions – total 5,854 4,576 + 28%

Private 5,138 4,154 + 24%

Affordable 716 422 + 70%

Ave selling price – total £175,500 £184,600 – 5%

Private £187,200 £194,500 – 4%

Affordable £91,700 £87,700 + 5%

Revenue £m 1,030.4 846.6 + 22%

Operating profit £m 114.9 107.4 + 7%

Operating margin 11.2% 12.7%


Market conditionsUK 2006

• Market stable throughout period

• Buyer confidence improved from Q4 2005 onwards

• Affordability constraints in many areas – prices remain competitive

• Southern markets showing greatest strength

• George Wimpey performance benefiting from stronger order book and improved sales position

• Gross margins in order book up more than 1% on December


Update on actions taken in December 2005Delivering on promises

• Now complete– addressed underperforming businesses – rationalised business structure to improve delivery and reduce overhead cost

• Continuous improvement building on H1 2006 progress– increasing margin– H1 / H2 volume balance– reducing build costs– land processes, people and culture


Increasing UK margins

• 30 June 2006 order book up more than 1% on 31 December 2005

• Future improvement from– improving selling prices– continuous cost reduction– improvement in landbank

• Consistent rather than overnight improvement


H1 / H2 balance The benefits

• Reduces risk and volatility in earnings

• Improved cash position – increases land capacity – reduces need for stop start land acquisition

• Not hand to mouth on sales– reduces impact of discounting in run up to year end

• ‘Evenflow’ business gives efficiency in build costs and procurement

• Reduces management distraction from long term view of the business


UK housing Improving cost base

• Objective to achieve build cost reductions to more than offset inflation and regulation changes

• Net cost movement H1 2006 v H1 2005 – down 1% per plot

• Following £20 m cost savings delivered 2004/5 cost reduction process renewed– Director of Procurement appointed– brief to undertake complete review of our supply chain – new focus on sales costs where benchmarking shows opportunity– preferred house type designs increasingly used on new sites acquired


Strengthening land positionQuality as well as quantity

• Objective to reduce real cost of land going forward

• Consistency of land acquisition approach – tougher process, not slower process

• Focus on ‘value added’ land rather than sourcing next year’s business

• Short term ‘retail land’ – existing strength within business– people and process in place

• Medium term ‘value added’ land – increased focus since late 2003 – people and processes in place – benefits starting to come through

• Longer term ‘value added’ land – new focus since early 2006


UK housing Source of owned and controlled landbank

0

10000

20000

30000

40000

50000

60000

D ec-04 D ec-05 Jun-06

plo

ts

L ong te rm land

Med ium te rm land

Short te rm land

Optimum mix

• 40% short term

• 30% medium term

• 30% long term


UK housing Strengthened owned land position

Cost per plot H1 2006 H1 2005

Opening landbank £46,500 £45,400

Acquired £43,800 £52,200

Completions £50,100 £47,700

Closing landbank £45,500 £46,300

H1 2006 completions

Landbank (owned plots)

Ave selling price £175,500 £179,900

Cost per plot £50,100 £45,500

Land value % ASP 28.5% 25.3%

• Plot cost in landbank below that of completions

• Land value as % of ASP 3.2% lower in forward landbank


UK housing Cost of land acquired

H1 2006 2005 full yr 2004 full yr 2003 full yr 2002 full yr

Cost per plot of land acquired

£43,800 £49,900 £46,500 £53,200 £48,400

ASP on completions £175,500 £178,000 £185,300 £174,300 £145,600

Cost per plot as %

of ASP on completions 25.0% 28.0% 25.1% 30.5% 33.2%


UK housing Going forward

• Market conditions remain stable– visitor levels and sales rates at normal seasonal levels

• Completions for H2 expected to be similar to H2 2005– total UK completions for 2006 expected to show some progress

• Margins in order book showing improvement on H1

• Order book at week 29 – total order book up 5% by volume– private order book 8% by volume

43

Group outlook Peter Redfern (Group Chief Executive)


George Wimpey PlcOutlook

• Group outcome for the year expected to be in line with our expectations

• US– long term fundamentals remain good, still difficult to predict outlook for full year– continue to strengthen regional positions for long term growth– short term focus on

• reducing costs• optimising sales

• UK – market remains stable, completions expected to show progress on 2005– focus on

• margin improvement • strong sales performance• improved land buying• reducing costs

• Objective to be the leading housebuilder in the UK and regional markets we choose in the US

45

George Wimpey PlcInterim Results for the half year ended 2 July 2006

APPENDIX


George Wimpey PlcUndeveloped land disposals

£000s H1 2006 H1 2005

Land sales UK 16,193 11,768

US 1,840 9,480

TOTAL 18,033 21,248

Profit UK 10,645 5,622

US - 1,707

TOTAL 10,645 7,329

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

H1

2006

H1

2005

H1

2006

H1

2005

H1

2006

H1

2005

UK private 6,693 5,936 286 321 0.90 0.71

UK affordable 594 1,201

UK TOTAL 7,287 7,137

US TOTAL 2,048 2,804 102 94 0.77 1.16

GROUP TOTAL 9,335 9,941 388 414


UK housing Turnover analysis

H1 2006 H1 2005 H2 2005 2005 full yr

Private volume 5,138 4,154 6,524 10,678

ASP £000s 187.2 194.5 184.8 188.6

turnover £m 962 808 1,206 2,014

Affordable volume 716 422 1,000 1,422

ASP £000s 91.7 87.7 103.3 98.6

turnover £m 66 37 103 140

Other turnover £m 3 2 2 4

TOTAL volume 5,854 4,576 7,524 12,100

ASP £000s 175.5 184.6 174.0 178.0

turnover £m 1,031 847 1,311 2,158


UK housingMargin analysis

H1 2006 H1 2005 H2 2005 2005 full yr

Gross profit £m 199.1 198.6 265.6 464.2

Gross margin % 19.3% 23.5% 20.3% 21.5%

Direct selling £m (43.0) (40.5) (45.7) (86.2)

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

Land profits 10.6 5.6 9.8 15.4

Operating profit £m 114.9 107.4 171.4 278.8

Operating margin % 11.2% 12.7% 13.1% 12.9%

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

Profit before interest 114.4 106.7 171.3 278.0


UK housingPrivate development product mix

Completions % H1 2006 H1 2005 H2 2005 2005 full yr

Apartments 40% 34% 37% 36%

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

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

100% 100% 100% 100%


UK housingPrivate development activity analysis

H1 2006 H1 2005 H2 2005 2005 full yr

Ave house size sq ft 971 1,015 980 994

ASP £ / sq ft 193 192 188 189


UK housingPrivate development price mix

H1 2006 H1 2005

Completions % Completions %

£51 – 100k 247 5% 162 4%

£101 – 150k 1,687 33% 1,250 30%

£151 – 200k 1,584 31% 1,325 32%

£201 – 250k 851 16% 792 19%

£251 – 300k 427 8% 311 8%

£301 – 500k 311 6% 268 6%

£500k + 31 1% 46 1%

TOTAL 5,138 100% 4,154 100%


UK housing Private development geographic mix

H1 2006 H1 2005 H2 2005

Legals Size

sq ft

ASP

£000

Legals Size

sq ft

ASP

£000

Legals Size

sq ft

ASP

£000

North 1,694 1,059 168 1,417 1,053 170 2,396 1,037 165

Midlands 1,547 939 169 1,197 1,008 176 1,882 937 167

South 1,775 950 227 1,461 1,001 231 2,138 981 222

City 122 738 222 79 713 242 108 473 163

TOTAL 5,138 971 187 4,154 1,015 195 6,524 980 185


UK housingPrivate development average weekly sales rates

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1.2

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

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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 housingLandbank by region

Owned and

controlled plots

Strategic acres

June 2006 June 2005 June 2006 June 2005

North 16,270 17,439 4,983 4,784

Midlands 17,396 12,045 4,532 5,329

South 18,718 21,337 4,250 6,218

City 2,133 3,559

TOTAL 54,517 54,380 13,765 16,331


UK housing Short term land (private and affordable)

OWNED H1 2006 H1 2005 H2 2005 2005 full yr

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

Net acquired 8,101 7,138 7,181 14,319

Legal completions (5,854) (4,576) (7,524) (12,100)

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

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

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


UK housing Owned land (private and affordable)

H1 2006 H1 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

Additions 8,101 43.8 355 7,138 52.2 372

Completions (5,854) (50.1) (293) (4,576) (47.7) (218)

End of period 41,688 45.5 1,895 39,784 46.3 1,844

Strategic Acres Value £m

Acres Value £m

End of period 13,765 61 16,331 49


• Outline planning consent - 1,400 units (acquisition based on 1,250) all private

• Phased land payments

• £163,000 projected average selling price

• HomeZone principles - where pedestrians are given priority over cars

• Mix includes– detached homes– apartments– PPG3 style compact housing

• First completion anticipated July 2007

Medium term land New Stoke Urban Village, Coventry


Long term landBells Lane, Hoo St Werbergh, Kent

• Strategic land site – option dates back to 1997

• Planning process on-going since early 2003

• Phase 1 - granted detailed consent July 2005

• Phase 2 - scheduled to go to committeewith recommendation for approval July 2006

• Phased payments

• Due to start on site in August 2006


Latham’s Yard, HackneyAltius and Riverside Wharf

• Shared development: GW East London and GW North Thames

• Utilising both brands: George Wimpey and Laing Homes

• Total 665 homes– includes affordable and live-work units– range from studio apartments to 3 bedroom mews

• Phased payment

• Within walking distance ofthe Olympic Village


University of East London, BarkingThe Academy

• Bought with planning brief but no formal planning consents

• Phased payments

• Bought with London & Quadrant Group – Limited Liability Partnership between GW

and L&Q Group on private element – also unconditional partners for affordable

element

• First completion anticipated early 2008

• Project due to be completed 2012


Impact of dollar

H1 2006 H1 2005 Change

Morrison Homes $ turnover 655.5 602.8 9%

Morrison Homes $ op profit 125.3 101.9 23%

Ave exchange rate 1.79 1.87

Morrison Homes £ turnover 366.2 322.4 14%

Morrison Homes £ op profit 70.0 54.5 28%


US housing Turnover analysis

H1 2006 H1 2005 H2 2005 2005 full yr

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

ASP $000s 333 302 320 313

Turnover $m 655 603 936 1,539


US housing Margin analysis

H1 2006 H1 2005 H2 2005 2005 full yr

Gross profit $m 201.4 168.3 288.2 456.5

Gross margin % 30.7% 27.1% 30.6% 29.2%

Direct selling $m (36.7) (31.6) (41.2) (72.8)

Overhead costs $m (39.4) (36.4) (40.6) (77.0)

Land profits - 1.6 - 1.6

Operating profit $m 125.3 101.9 206.4 308.3

Operating margin % 19.1% 16.9% 22% 20.0%


US housingActivity analysis

H1 2006 H1 2005 H2 2005 2005 full yr

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

ASP $ / sq ft 137.5 128.2 141.0 136.0


US housing Price mix

H1 2006 H1 2005

Completions % Completions %

$0 – 200k 307 16% 390 19%

$201 – 250k 215 11% 395 20%

$251 – 300k 243 12% 332 17%

$301 – 350k 382 19% 265 13%

$351 – 400k 325 17% 215 11%

$401 – 450k 226 11% 172 9%

$451 – 500k 122 6% 128 6%

$500k + 148 8% 99 5%

Total 1,968 100% 1,996 100%


US housingGeographic mix

Completions H1 2006 H1 2005 H2 2005 2005 full yr

West 384 460 727 1,187

Southeast 790 932 1,321 2,253

Southwest 794 604 877 1,481

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

Average selling price $000

West 422 428 430 429

Southeast 365 282 313 300

Southwest 259 237 240 239

TOTAL 333 302 320 313


US housingRegional performance

Turnover Operating profit Operating margin

H1 2006

$m

H1 2005

$m

H1 2006

$m

H1 2005

$m

H1 2006

%

H1 2005

%

West 162 197 29.3 56.5 18.1% 28.7%

Southeast 287 262 66.9 39.2 23.3% 14.9%

Southwest 206 144 38.8 16.8 18.8% 11.7%

Corporate - - (9.7) (10.6) - -

TOTAL 655 603 125.3 101.9 19.1% 16.9%


US housingShort term land

Owned and options H1 2006 H1 2005 H2 2005 2005 full yr

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

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

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

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

Controlled

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

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

LAND SPEND $m 156 151 152 303

1 george wimpey plc interim results for the half year ended 2 july 2006 1 august 2006

Documents

half year

half results mh1 2006h1

operating efficiency

longer term view slide

uk order book slide

group completions

key markets uk

group strategy objectives