Taylor Wimpey expects top profits as margins hit record highs

Taylor Wimpey expects profits to be higher than expectations after announcing strong half-year results. The housebuilder said it was now anticipating a full-year profit of around £820m, as margins rose to record highs. Operating profits for the half were £424m, on revenues of £2.2bn. Chief executive Pete Redfern said that UK completions, excluding joint ventures, were expected to end the year at “13,200 to 14,000”. He added that operating profit margins had risen to 19.3%, up from H1 2019’s 18%, as well as a marked improvement on the pandemic-stricken H1 2020 when its margins were in negative territory. The company said the rise was largely owing to the success of its cost-cutting programme, but aims to increase margins to 22% in the medium term. Redfern said: “We have delivered a record first-half performance.” However, he said the “focus remains on driving further improvement in our operating profit margin”. Over the last six months Taylor Wimpey has completed 7,303 homes, against just 2,771 during the same period in 2020, although it acknowledged that the spike was largely a result of delays to completions expected in Q4 of 2020. The order book is also looking healthy, with 10,344 homes worth £2.6bn, excluding joint ventures, although that is down on last year’s 11,686 homes, worth £2.9bn. However, forward sales for the half were up, clocking in at 97%, against H1 2020’s 91% and H1 2019’s 82%. Planning permissions have also soared as the country unlocks, with 14,500 plots approved during the first half, against 2020’s half time score of 5,200. Meanwhile, the housebuilder has added around 5,000 plots to its short-term landbank, building that to 82,000 plots – a 15,000 plot rise on H1 of last year. This is in addition to its strategic land pipeline which has swelled to 147,000 potential plots from 139,000 in December. Redfern said: “Backed by last year’s equity raise we stepped up our activity in the land market before competition returned and we successfully increased our land pipeline with high-quality sites that will deliver a strong financial performance. We are progressing this land through the planning stages as expected.” To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo: Taylor Wimpey