Taylor Wimpey upbeat over full year results

Against the backdrop of a stable housing market in 2016, UK-based contractor Taylor Wimpey has announced that it continued to see good demand and solid trading into the second half of the year, despite wider macroeconomic uncertainty.

It said, “Customers continue to benefit from a wide range of mortgage products and low interest rates with customer confidence remaining robust.

“We have continued to make good progress towards each of our enhanced medium term targets during 2016.”

The group said it expected to report an improved full year operating profit margin of around 20.8% up from a 2015 figure of 20.3%, and a return on net operating assets of over 30%, up from 27.1%.

It ended the year with net cash of around £365 million (€421 million), compared with £223.3 million (€258 million) a year earlier, due to the strength in underlying trading and after the payment of £355.9 million (€411 million) of dividends to shareholders in 2016 compared with £308.4 million (€355 million) in 2015.

CEO Pete Redfern said, “We are pleased to report good progress in 2016, with an increase in housing completions and robust trading despite wider macroeconomic uncertainty. In a market characterised by solid fundamentals, we ended the year with a strong forward order book, and made good progress against our enhanced medium term targets.

“We expect to deliver full year profitability at the upper end of market consensus. Looking ahead, we remain confident that our disciplined strategy will enable us to continue to deliver value over the long term.”

In 2016, total home completions increased by 4% to 13,881, including Taylor Wimpey’s share of joint venture completions – 13,341 in 2015. During 2016, it delivered 2,663 affordable homes compared to 2,509 the previous year, equating to 19% of total completions, which was unchanged from 2015.

Taylor Wimpey ended 2016 with a year-end order book valued at £1,682 million (€1,942 million) excluding joint ventures, with a small fall in the average selling price largely as a result of a number of high value central London completions in December 2016. This order book represents 7,567 homes, a slight rise on the 31 December, 2015, figure of 7,484 homes.

As at the end of December 2016, Taylor Wimpey’s short term landbank stood at around 76,000 plots – the same as 2015, having successfully converted over 9,000 plots from the strategic pipeline into the short term landbank.

It added, “Looking ahead, we remain mindful of the wider macroeconomic uncertainty created by the outcome of the EU Referendum. In line with our disciplined strategy and with the benefit of a long landbank and underpin of strategic pipeline, we will continue to be selective in further land investment.”

The company said it expected to demonstrate further progress throughout 2017, “delivering increased returns for our shareholders and focusing on areas of the operational business where we can add value, including driving further improvements in our customer service processes and product quality”.

The full year results will be announced at the end of February.