Taylor Wimpey reports 16% rise in profit

Taylor Wimpey has increased profit by 16% to £643m, despite handing a further £80m to the government for building safety costs. Group revenue rose to £4.4bn for the year, up from £4.28bn in 2021, with a slight fall in completions offset by rising selling prices. Gross margin of 25.6% was up from 2021’s 24% as house price inflation exceeded build cost inflation. Profit for the year was £643.6m, up from 2021’s £555.5m. The housebuilder said trading showed “some signs of improvement” from the slow Q4 2022. However, it added that despite the “uptick in sales and ongoing robust customer interest in our homes”, reservation rates were significantly lower than in recent years due to affordability concerns among potential buyers. It said it had reflected those concerns in its build programmes for the year. The announcement echoes Persimmon, which yesterday confirmed that its build volumes would be 40% less than in 2022. Taylor Wimpey said the £80m handed over to the government for building safety brought the total to £245m. In the statement it said: “It is our long-held view that leaseholders should not have to pay for the cost of remediation.” Taylor Wimpey first committed funds to remediation of ACM cladding in 2017. It added: “We are in final discussions with Department for Levelling Up, Housing and Communities with a view to signing the long form agreement which makes the principles of the Building Safety Pledge legally binding.” The housebuilder said 207 buildings fall within the scope of its existing provision, but around a quarter of those only require the replacement of wooden balcony beams, “which are relatively inexpensive to replace”. It added the £245m was its “best estimate” of the cost of its commitments and had already been accounted for. Taylor Wimpey said it had also contributed £455m to local communities via planning obligations over the year, up from £418m in 2021. It also announced that Irene Dorner will step down as chair following the 2023 AGM in April, and will be succeeded by former Landsec chief executive and Hammerson chair Rob Noel. The housebuilder will shortly open its 240,000 sq ft timber frame factory next to its existing logistics site at Kingston Park, Peterborough. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Image: Taylor Wimpey