25th Sep 2014 15:19
LONDON (Alliance News) - Moody's Investor Services has upgraded Taylor Wimpey PLC's corporate family rating to Ba1 from Ba2 on the back of a strong growth in sales.
Moody's has also upgraded the company's probability of default to Ba1-PD from Ba2-PD, saying that the outlook on all ratings is stable.
"The upgrade to Ba1 was prompted by growth in Taylor Wimpey's sales and profitability, leading to improvement in its financial strength metrics," says Maria Maslovsky, assistant vice president and lead analyst for Taylor Wimpey at Moody's. "The improved performance reflects both strategic initiatives implemented by the company, as well as an increasingly favourable market environment," Maslovsky adds.
Moody's highlights the strength of Taylor Wimpey's credit metrics saying that it has interest coverage of 11.5x for the last 12 months to June 30. In addition Taylor Wimpey currently has no outstanding public debt and a stable cash flow, indicating good liquidity.
"Taylor Wimpey's success in increasing its profitability and boosting its debt protection metric resulted not only from the disciplined execution by the company but also from the more favourable business environment," Moody's says. "Since the last recessionary trough, housing prices, mortgage availability and planning outlook have all demonstrated marked improvement, bolstering Taylor Wimpey's and other homebuilders' performance."
Taylor Wimpey shares trade down 1.8% in late trade Thursday at 113.2796 pence.
By Neil Thakrar; [email protected]
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