TIDMTW.
RNS Number : 0150X
Taylor Wimpey PLC
25 April 2019
25 April 2019
Taylor Wimpey plc
Trading statement for the period covering 1 January 2019 to
today
Taylor Wimpey plc is holding its Annual General Meeting (AGM) at
11:00 today in London, where the following comments will be made
regarding current trading, financial performance and outlook for
the financial year.
Overview
Pete Redfern, Chief Executive, commented:
"We've made a good start to 2019 and in spite of wider
macroeconomic uncertainty, the housing market has remained stable.
We are achieving a record sales rate and building a solid forward
order book for the year, although we see increased build cost
pressures.
We continue to make encouraging progress in embedding our
customer-centric strategy and driving significant improvements in
our quality and delivery, and it was pleasing to be recognised by
the Home Builders Federation (HBF) as a five-star homebuilder in
March this year. Our priority is to enhance every step of our
customers' buying and aftercare service so that we deliver the
highest quality homes and become the first choice homebuilder.
Looking ahead, we are focused on delivering our ambitious
strategic goals to drive sustainable growth and create long term
value for our customers and shareholders."
UK current trading
The market for new build housing has remained stable in the
first four months of 2019. The underlying drivers of housing demand
remained robust with continued good accessibility to mortgages and
low interest rates for customers, combined with high employment
levels.
Throughout the spring selling season, sales have continued to be
at encouraging levels. Average private sales for the year to date
were 1.03 per outlet per week (2018 week 16: 0.85) which is ahead
of our expectations for 2019 and demonstrates continued progress in
optimising our larger sites as part of our strategy. Sales pricing
has remained flat relative to the end of 2018. Cancellation rates
remained low at 13% (2018 week 16: 13%).
We continue to prioritise building a strong order book. As at
week ending 21 April 2019, our total order book value stood at
approximately GBP2,399 million (2018 week 16: GBP2,155 million).
This represents 10,291 homes (2018 week 16: 9,050 homes), excluding
legal completions to date.
We have seen higher than expected cost inflation in early 2019,
particularly in materials, and now expect build cost inflation for
2019 to be c.5%. This is driven by a combination of underlying
cumulative inflation and exchange rates impact on the cost base of
suppliers, and a higher than expected demand in the short term from
defensive additional buffer stock holding in the construction
industry supply chain.
Land portfolio, planning and outlets
The short term land market remains stable with opportunities to
acquire land at attractive profit margins. Our land teams remain
active in the market and land acquisition year to date has been
encouraging. At the end of March 2019, our short term landbank
stood at c.79k plots (2018 equivalent period: c.77k plots). We
continue to engage widely and work together with local authorities
and communities to secure planning permission for our strategic
pipeline sites. Our strategic land pipeline stood at c.128k
potential plots, as at the end of March 2019, following the
conversion of c.3k plots into the short term landbank so far this
year.
We remain focused on progressing our sites through the planning
system to enable us to start work on sites with implementable
planning as efficiently as possible and open our sales outlets in
the right way for our customers. We have made good progress on
outlet openings, with progress slightly ahead of our expectations.
We are currently operating from 261 outlets (2018 week 16: 278
outlets).
Dividends
Subject to shareholder approval at today's AGM, we will be
paying a final ordinary dividend of 3.8 pence per share on 17 May
2019 (2017 final dividend: 2.44 pence per share), giving a total
ordinary dividend for the year of 6.24 pence per share (2017 total
ordinary dividend: 4.74 pence per share), an increase of 32%.
As previously announced, we will also be paying a special cash
dividend of c.GBP350 million (10.7 pence per share) on 12 July 2019
(July 2018: 10.4 pence per share), subject to shareholder approval
today.
Board updates
As previously announced, James Jordan, Group Legal Director and
Company Secretary, will stand down from the Board on 31 December
2019. James will continue with the business until he retires on 31
March 2020. We would once again like to express our thanks to James
for his invaluable contribution to Taylor Wimpey during his 17
years of service.
Upon the conclusion of today's AGM, the Board confirms that Gwyn
Burr, Independent Non Executive Director, will assume the role of
Chair of the Remuneration Committee, in good time for the
preparation of a new remuneration policy to be submitted to
shareholders by way of a binding vote at the 2020 AGM. The Board
would like to express its thanks to Dame Kate Barker, Senior
Independent Director, for all of her work, leadership and judgement
as Chair of the Remuneration Committee over the past three years.
Kate, who was appointed to the Board as an Independent Non
Executive Director in April 2011, will continue to be a member of
the Remuneration Committee.
Outlook
Trading through the spring selling season has been good, with
robust customer confidence despite the wider political
uncertainty.
We remain on track to meet our overall expectations for the year
but expect results to be weighted towards the second half. Given
the strong sales performance, we expect full year volumes to be
slightly higher than 2018, but given the greater build cost
inflation for the year, we expect margins to be slightly lower.
We are well positioned with a clear strategy in place that
provides the flexibility to further increase our pace of build in
future years, provided market conditions remain supportive. Subject
to land spend variations, we expect to end the year with a net
cash(++) position of c.GBP500 million after dividend payments of
c.GBP600 million, which are subject to the approval of shareholders
today.
Our priority remains to deliver further improvements to
customers, as part of our customer-led strategy, which will in turn
drive increased value for shareholders. We are pleased to have
recently been recognised as a five-star homebuilder with a customer
recommendation score of over 90%, as measured by the National New
Homes Survey undertaken by the National House-Building Council
(NHBC), on behalf of the Home Builders Federation (HBF). We remain
focused on getting our homes right first time and creating thriving
communities, together with enhancing our delivery capability and
investing in the right resource to enable us to deliver
high-quality homes to more customers in the years ahead.
(++) Net cash / (debt) is defined as total cash less total
borrowings.
-Ends-
For further information please contact:
Taylor Wimpey plc Tel: +44 (0) 7708 801702
Pete Redfern, Chief Executive
Chris Carney, Group Finance Director
Debbie Archibald, Investor Relations
Finsbury Tel: +44 (0) 20 7251 3801
Faeth Birch
Anjali Unnikrishnan
Notes to editors:
Taylor Wimpey plc is a customer-focused residential developer,
operating at a local level from 24 regional businesses across the
UK. We also have operations in Spain.
For further information, please visit the Group's website:
www.taylorwimpey.co.uk
Follow us on Twitter via @TaylorWimpeyplc
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END
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