Taylor Wimpey plc (LON:TW) reported first half revenue of £2.1bn, down 5.4% as the group lapped record performance last year. Excluding joint ventures, the group completed on 6,760 homes, down from 7,303 last year but ahead of guidance.
Planned land sales and strong performance from Joint Ventures pushed margins up, helping operating profit stay broadly flat at £424.6m.
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The group now expects full year operating profit toward the top end of £873-£924m. That’s driven by average selling prices that are expected to be 4-5% higher than last year, fully offsetting 9-10% build cost inflation. UK completions are expected to see low single digit growth, with a year end net cash balance around £600m.
The board has proposed an interim dividend of 4.62p, up 8% on last year.
The shares rose 1.9% following the announcement.
Taylor Wimpey's Earnings
Matt Britzman, Equity Analyst at Hargreaves Lansdown
“Taylor Wimpey capped off a strong first half where completions came in ahead of expectations and operating profit for the full year’s now expected toward the top end of previous guidance - the shares popped a couple of a percent as a result.
This was a good set of numbers against the backdrop of record performance last year. There’s still a structural supply/demand imbalance in the UK propping up prices despite consumer spending power falling. The forward order book looks strong and Taylor Wimpey’s doubling down on efforts to take full advantage, opening the check book to push more outlets and being new land plots into the fold.
Cost inflation remains a thorn, running around 9-10% but fully offset by higher prices for now. It remains to be seen how long that can continue, but while it does shareholders can continue to expect solid returns.”
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