Completions decline predicted at Taylor Wimpey

Following a recent report from Persimmon that legal completions at the firm could fall to between 8,000 and 9,000 homes after it completed 14,868 last year, Taylor Wimpey has followed suit with an equally pessimistic forecast for completions this year.

Related topics:  Business,  Construction,  Housebuilder,  Taylor Wimpey
Property | Reporter
6th March 2023
construction 7
"While the weaker economic backdrop continues to impact the near-term outlook, customer interest in our homes remains good"

According to the volume housebuilder, completions this year are likely to be in the range of 9,000 to 10,500 against the 14,154 homes it achieved during the year to December 31 2022 despite current trading showing “some signs of improvement” from the difficult fourth quarter of 2022.

The year-to-date net private sales rate was 0.62 per outlet per week compared to the 1.02 of last year’s equivalent period.

TW acknowledged that its reservation rate was still “significantly lower” than in recent years with affordability concerns persisting, “, particularly for first-time buyers”. It has adjusted for the toughened environment in its build programmes.

As of February 26, Taylor Wimpey’s total order book stood at £2,154 million (2022 equivalent period: £2,899 million), consisting of 8,078 homes (2022 equivalent period: 10,934 homes).

During 2022, the firm’s revenue increased 3.2% to £4,419.9 million against 2021. Pre-tax profit climbed 21.8% to £827.9 million, with operating profit rising 11.4% to £923.4 million. The operating profit margin improved from 2021’s 19.3% to 20.9%.

Completions fell slightly from 2021’s 14,302 homes; the private average selling price increased 6% to £352,000. The net sales rate for 2022 was 0.68 homes per outlet per week (2021: 0.91).

Jennie Daly, Taylor Wimpey’s CEO, said: "We have delivered a strong financial and operational performance in 2022 with full-year operating profit in line with expectations. We are particularly pleased to have delivered a strong operating profit margin as a result of tight operational controls and price discipline.

“In a year marked by two distinct halves, we acted quickly and decisively to address rapidly changing market conditions in the second half of the year and continued to focus on operational excellence and efficiency.

“While the weaker economic backdrop continues to impact the near-term outlook, customer interest in our homes remains good and, whilst it is still early in the year, trading has shown some signs of improvement compared to Q4 2022.”

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