Posted: Monday, January 23, 2012 3:14 pm

Company Watch, the corporate health monitor, says it's latest research shows that almost half of the UK’s largest house building groups are in poor financial health. The watchdog says although some leading house builders are doing well, the outlook for other major players in the sector is bleaker.

The watchdog says that some house builders are performing strongly. It says there has been a raft of positive announcements in the past few days from Taylor Wimpey, Persimmon, Barratt Developments, Bovis Homes and Galliford Try, who it says are benefiing from tough cost cutting, margin improvement and debt reduction strategies implemented in response to the slowdown in the housing market. 

However, although some leading house builders are doing well, the outlook for other major players in the sector is less rosy says Company Watch. An analysis of the leading house builders’ previous five sets of published accounts and other public domain information shows seven out of the 15 (47%) of the largest house builders scoring fewer than 25 points out of a maximum H-Score® of 100.  

This puts them firmly in Company Watch’s Warning Zone. With many households struggling to make ends meet and rising unemployment sapping consumer confidence, it’s unsurprising that property experts expect a challenging year ahead for the house builders, says the watchdog.

*2011 rankings based on latest available full-year turnover. H-Scores and turnover are given for the highest consolidated parent company.

**Statistics on all UK companies for the past 14 years show that one in four companies in the ‘Warning Zone’ either file for insolvency or undergo a major financial restructuring.