Housebuilding giant Taylor Wimpey remaining cautious despite a return to profit

The company, which has shifted its focus from volume to "maximising the value" of each home sold, said pre-tax profits before exceptional items were 75.1 million in 2010, against losses of 96.1m a year earlier.

City expectations had ranged between 24.1m and 70m, with the consensus forecast at 50m, according to a poll of analysts. Revenues were virtually flat, up just 0.3 per cent to 2.6 billion.

Taylor Wimpey said it had been encouraged by sales rates and prices so far this year but added that constrained mortgage lending and the economic uncertainty meant it remained cautious about prospects.

Projects under way in Scotland include converting the Argyle Building in Glasgow into flats and building houses at Dunbar, Falkirk, Paisley and Stepps. The group employs about 210 staff directly in Scotland and some 5,000 in the UK as a whole.

UK operating margin jumped to 7.1 per cent in 2010, from 1.7 per cent in 2009.

The firm agreed new lending terms with its banks in a move that has removed a number of operational restrictions.

It has also begun the process of selling its North American housebuilding division, Taylor Morrison.

The FTSE-250 builder is selling the unit to pay down debt and focus on its domestic market, with a growing list of potential buyers, including Canada's privately-held Mattamy Homes and Meritage Homes, sources said.

In the UK, the firm completed a total of 9,962 homes last year, down from 10,186 in 2009 but with an average selling price 7 per cent higher at 171,000.

Taylor Wimpey said it was on track to meet its target of double-digit operating margins in 2012, and that net debt shrunk to 654.5m from 750.9m.

The firm is working with the mortgage industry to identify ways of increasing lending supply, such as its "Take Five" product that uses an insurance-backed guarantee to provide a 95 per cent mortgage.

Jon Bell, an analyst at Shore Capital, said: "While trade appears to be stabilising in the company's main markets, we believe the stock market is largely pricing in the sale of the North American assets and, therefore, there is little room for disappointment in this respect.

"We maintain our 'hold' recommendation on the shares, believing better value exists elsewhere in the sector, namely Bellway and Persimmon."

On Tuesday, rival Persimmon said it was "encouraged" by the marketplace so far this year while Barratt recently narrowed its losses.