Taylor Wimpey lifts guidance, pays dividend as profits return
Home builder Taylor Wimpey on Wednesday upgraded annual guidance and reinstated its dividend as it swung to a first-half profit on the back of a booming housing market.
Pre-tax profit for the six months to June 30 came in at £287.5m compared to loss of £39.8m last year. Revenue soared to £2.20bn from £754.6mas home completions jumped to a record 7,303, up from 2,771 when most sites were shut down due to the Covid-19 pandemic.
It made half-year operating profits of £424m against losses of £16.1m.
An interim dividend of 4.14p per share was declared. The company said it now expected full-year operating profit to be around £820m, above the top end of consensus.
The company said its total UK order book represented 10,344 homes with a value of £2.6bn at July 4.
Full-year completions were expected to be towards the upper end of its guidance range of 13,200 - 14,000 homes.
“The UK housing market remains strong, underpinned by low interest rates, good mortgage availability and government support for customers,” Taylor Wimpey said. House sales in Britain have surged due to pent-up demand after lockdowns and government support measures such as the stamp duty holiday and and a pandemic-driven preference for larger houses.
Rivals Barratt Developments and Persimmon last month predicted that the strong demand for housing would continue even after the government’s stamp duty holiday on property purchases ends in September.
“There have been healthy levels of customer interest in reservations extending well beyond the end of the Stamp Duty Land Tax holiday,” Taylor Wimpey added.
It said its private homes developments were around 99% forward sold as at August 1, up from some 97% a year earlier and 87% two years ago. However, it also joined rivals in flagging rising material and build costs, which are having an impact across the construction sector.