Taylor Wimpey hits record sales rate as profits slump

Taylor Wimpey reported a record sales rate, up 20% on last year, but profits and margin fell with flat pricing, build cost inflation and investment in future-proofing the business. It reported an average sales rate of 0.96 homes per week, for the year ended 31 December, against 0.80 in the previous year. Profits before tax and exceptional items fell 4.1% to £821.6m. Taylor Wimpey reported an operating profit margin of of 19.6%, compared to 21.6% the previous year, and a target of circa 21-22%. It said political and economic uncertainty led to flat sales pricing, met against high build costs and investment in quality had squeezed margins. The business expects build cost inflation of around 3% in 2020 and is focusing to reduce underlying costs. It said operating profit margins remained a key priority, but added that the first half of the year would likely reflect continued pressure on pricing, costs and investment. Taylor Wimpey forecasted a dip in 2020 sales volumes and sales rates “as we focus on capturing value”. Chief executive Pete Redfern said: “During the year, we continued to strengthen our business and build a sustainable advantage, improving our core customer proposition and business flexibility through investments in customer service, quality, build capacity and direct labour. These investments will strengthen the business for the long term. “In 2020, we will focus on further embedding and leveraging these improvements across the business while increasing our focus on cost discipline and process simplification.” To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette