George Wimpey, Britain's fourth largest housebuilder, is ready to up its spending on land to more than £1 billion a year to replenish its housing stock after pulling out of the £2 billion bid battle for Wilson Bowden last month.

Delivering forecast-busting 2006 figures, Wimpey chief executive Peter Redfern said he felt no time pressure to buy any other UK rivals but was on the look-out for opportunistic bolt-on buys of smaller US regional housebuilders to add to the firm's Morrison Homes division.

Analysts took heart from the strong improvement in second-half margins from Wimpey's core UK business which hit 14.3 per cent compared to margins of 12.7 per cent in the first half.

Gearing is at 23 per cent, the lowest for six years leaving plenty of room for Wimpey to spend hundreds of millions of pounds more than the £900 million spent last year on land.

Mr Redfern said: "We have the capability to both execute and integrate something significant. We are happy with our UK performance this year as it exhibits organic growth. But we do think scale matters and acquisitions have a place in the arsenal of things we can do. We have the choice."

Operating profits from the UK business to the end of December rose 14 per cent to £317.6 million on an 11 per cent rise in revenue to £2.39 billion. Total UK completions rose 13 per cent to 13,616 homes.

Wimpey's American business bore the brunt of the slowdown in the US housing market, as warned in December, with operating profits down 31 per cent to £116.9 million and a forward order book at the end of 2006 down 62 per cent by volume and 67 per cent by value on the year before. But while the outlook is challenging for this year, the US market has picked up with cancellation rates on reservations, which were running at 52 per cent in the second half, back to 20 per cent during the first seven weeks trading.

Group revenue rose 5 per cent to £3.147 billion, while pre-tax profits fell 15 per cent to £310.2 million after a one-off £60.7 million writedown of US land inventories, as warned in December.

The dividend rises 10 per cent to 19.4p.