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George Wimpey Plc Preliminary Results for the year ended 31 December 2006

This presentation highlights the preliminary financial results of George Wimpey Plc for the year ended 31 December 2006, including group profit, volume growth, UK and US housing reviews, outlook and strategy.

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George Wimpey Plc Preliminary Results for the year ended 31 December 2006

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  1. George Wimpey Plc Preliminary Results for the year ended 31 December 2006 21 February 2007

  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. Preliminary Results for year ended 31 December 2006

  3. Welcome John Robinson (Chairman)

  4. 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 Preliminary Results for year ended 31 December 2006

  5. Introduction Peter Redfern (Group Chief Executive)

  6. 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 Preliminary Results for year ended 31 December 2006

  7. 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 Preliminary Results for year ended 31 December 2006

  8. 2006 financial review Andrew Carr-Locke (Group Finance Director)

  9. 2006Full year results Preliminary Results for year ended 31 December 2006

  10. 2006Full year results Note: EPS, ROACE, operating profit and profit before tax are all shown before exceptional items Preliminary Results for year ended 31 December 2006

  11. Segmental analysisFull year 2006 * Before exceptional items ** Operating margin before JVs and exceptional items Exchange rate in 2006 £:1.84$ 2005 £:1.82$ Preliminary Results for year ended 31 December 2006

  12. CompletionsFull year 2006 Preliminary Results for year ended 31 December 2006

  13. Interest charge Preliminary Results for year ended 31 December 2006

  14. US land write-downsBreakdown • Write-down reflects selling price reduction needed to provide a normal sales rate calculated on a prudent basis Preliminary Results for year ended 31 December 2006

  15. US land write-downsIndustry comparisons Credit Suisse estimates/company’s own reports – 2006 year end Preliminary Results for year ended 31 December 2006

  16. Balance sheet Preliminary Results for year ended 31 December 2006

  17. Balance sheetFinancing Preliminary Results for year ended 31 December 2006

  18. Cash flow summary Preliminary Results for year ended 31 December 2006

  19. 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 Preliminary Results for year ended 31 December 2006

  20. US housing review Steve Parker (President, Morrison Homes)

  21. US housingFinancial summary Preliminary Results for year ended 31 December 2006

  22. US housing2006 market conditions • 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 Preliminary Results for year ended 31 December 2006

  23. Short term market conditions Total US stock position • New homes includes homes completed, under construction and not yet started Preliminary Results for year ended 31 December 2006

  24. US housingIndustry comparisons 2006 Estimates from Credit Suisse, pre-exceptional figures based on latest full year Preliminary Results for year ended 31 December 2006

  25. US housingTotal landbank Preliminary Results for year ended 31 December 2006

  26. 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 Preliminary Results for year ended 31 December 2006

  27. US housingMorrison sales performance Preliminary Results for year ended 31 December 2006

  28. US housingAverage weekly sales rates Preliminary Results for year ended 31 December 2006

  29. 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 Preliminary Results for year ended 31 December 2006

  30. 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 Preliminary Results for year ended 31 December 2006

  31. UK housing review Peter Redfern (Group Chief Executive)

  32. UK housing Financial summary *Excluding JV results Preliminary Results for year ended 31 December 2006

  33. UK housing Delivery on promises Preliminary Results for year ended 31 December 2006

  34. 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 Preliminary Results for year ended 31 December 2006

  35. UK housingGeorge Wimpey sales performance • Record 2007 opening order book gives great platform • Open outlets remain as main target area for improvement Preliminary Results for year ended 31 December 2006

  36. 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 Preliminary Results for year ended 31 December 2006

  37. UK housing Spotlight on cost Impact of £2.50 per sq ft saving equates to circa £35m pa Preliminary Results for year ended 31 December 2006

  38. UK housing Strengthened land position • 14% growth in owned and controlled plots • All 2007 expected completions have planning Preliminary Results for year ended 31 December 2006

  39. UK housing Source of short term owned and controlled landbank • Optimum mix • 40% short term • 30% medium term • 30% long term Preliminary Results for year ended 31 December 2006

  40. UK housing Strengthened owned land position • Plot cost in landbank below that on completions • Shift in landbank mix will start to come through in 2007 Preliminary Results for year ended 31 December 2006

  41. UK housing Margin commitments firmed up • 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% Preliminary Results for year ended 31 December 2006

  42. 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 Preliminary Results for year ended 31 December 2006

  43. Group outlook and strategy Peter Redfern (Group Chief Executive)

  44. 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 Preliminary Results for year ended 31 December 2006

  45. 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 Preliminary Results for year ended 31 December 2006

  46. 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 Preliminary Results for year ended 31 December 2006

  47. 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 Preliminary Results for year ended 31 December 2006

  48. George Wimpey Plc Preliminary Results for the year ended 31 December 2006 APPENDIX

  49. George Wimpey PlcUndeveloped land disposals Preliminary Results for year ended 31 December 2006

  50. George Wimpey Plc Group reservations Preliminary Results for year ended 31 December 2006

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