Strong year for Taylor Wimpey

A strong 2018 has been reported by UK-based contractor Taylor Wimpey, which also said it had made a positive start to 2019 “despite ongoing macroeconomic and political uncertainty”.

There was a 4.3% increase in 2018 operating profit (defined by the company as profit on ordinary activities before net finance costs, exceptional items and tax, after share of results of joint ventures) at £880.2 million (€1.03 billion). It said this had been driven by improved performance in both its UK and Spanish businesses.

Profit for the year was reported to be £656.6 million (€765.56 million) – up 18.2%. This was attributed to the improved underlying performance and a reduced post-tax exceptional charge of £37.9 million (€44.19 million), which was £105 million (€122.42 million) in 2017.

CEO Pete Redfern said that 2018 had been another strong year for Taylor Wimpey with good progress against its strategic priorities.

“We delivered in line with our expectations, achieving a strong sales rate and record revenues.

“Despite ongoing macroeconomic and political uncertainty, we have made a very positive start to 2019 and are encouraged to see continued strong demand for our homes. We enter the year with a strong order book and a clear strategy in place to deliver long-term value for shareholders.”

He said the company was pleased with how its business was adapting to its customer-centred strategy.

“We are enhancing every step of our customers’ buying and aftercare service so that we become the first choice homebuilder in all market conditions.”

Forward order book

The UK forward order book value stood at £1.78 billion (€2.08 billion) at 31 December, 2018, which was a rise from the £1.63 billion (€1.90 billion) reported a year earlier.

Taylor Wimpey said it had made a positive start to 2019 and, coming into the spring selling season, customer confidence remained robust.

It said it had continued to prioritise the building of a strong order book for the future, which it felt was particularly important in an uncertain market, while ensuring it was managing its customers’ timing, and meeting their requirements.

In current market conditions, it said it continued to expect stable volumes in 2019, and for underlying build cost increases during 2019 to be at a similar level to 2018, at around 3 to 4%.

The company said that while it was conscious of the wider political and economic risks – particularly as the UK planned its exit from the EU – it was confident that its strong balance sheet, with a high-quality landbank, and a strategy focused on customers made it a more resilient business.

It added that this strategy also gave it the flexibility to increase its pace of build, and accelerate growth in 2020, depending on market conditions, while maintaining focus on quality land investment in good locations.