Profits down at Taylor Wimpey despite strong completions

Persistent challenges in the wider market have seen profits at Taylor Wimpey slump by almost 43% despite posting half-year completions that were ahead of expectations.

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Property | Reporter
4th August 2023
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The volume housebuilder hailed a “resilient” first half, achieving 5,082 completions (excluding joint ventures). However, these were still 25.2% lower than H1 2022.

Pre-tax profit dropped to £237.7m from last year’s £414.5m. Revenue decreased 21.2% to £1,637.1m, with its operating profit margin falling from 20.4% to 14.4% as house price inflation failed to fully counter build cost inflation.

The business said that it had been trading against a “variable market backdrop”, with an encouraging start to the year as demand recovered from the lows of Q4 2022 and mortgage rates stabilised.

However, the market “weakened” during Q2 as the Bank of England raised interest rates in response to higher-than-expected inflation. The business said it was supporting customers through its customer relationship management system “to drive further enhancements in the sales process”.

For the four weeks ending July 30, which Taylor Wimpey noted was the start of the “seasonally quieter” third quarter, its net private sales rate was 0.47 per outlet per week (2022 equivalent period: 0.57).

The firm expects full-year completions to be in the range of 10,000 to 10,500 homes, at the “upper end” of its previous guidance. Earlier in the year, it had anticipated 2023 completions of 9,000 to 10,500 homes.

It expects full-year group operating profit to be between £440 million and £470 million.

Jenny Daly, Taylor Wimpey’s CEO, said: “The first half of the year has been characterised by variable market conditions including substantially higher mortgage rates. While this has inevitably impacted our results, I am pleased that we have delivered a resilient performance with first-half completions slightly ahead of our expectations.

"This performance is a testament to the hard work of our teams on the ground and our strong focus on operational excellence and tight cost management.

“As we move into the second half of the year, our focus remains on optimising all areas of our operations as we continue to support our customers during this uncertain period.”

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