30th Jul 2014 08:20
LONDON (Alliance News) - UK housebuilder Taylor Wimpey PLC Wednesday reported an increase in profit for the first half, buoyed by a strong housing market in London and the South East.
The company posted pretax of GBP210.2 million for the half year ended June 29, up 26% from GBP166.5 million a year earlier. Pretax profit before exceptional items rose to GBP178.4 million from GBP109.0 million a year earlier.
Revenue rose 18% to GBP1.19 billion in the half from GBP1.01 billion a year earlier, driven by much improved selling prices. Average selling prices in the UK rose to GBP205,600 from GBP187,600, while prices for UK private sales crept up to GBP224,100 from GBP205,200 a year earlier, benefiting from a mix of product and improved quality locations.
During the period 5,959 homes were built compared with 5,159 homes a year earlier.
FTSE 250-listed Taylor Wimpey said Help to Buy equity loans continue to be very popular with its customers and during the first half, it completed around 42% of private homes through the scheme.
The first phase of the Help to Buy scheme in England started in April 2013, making buyers of newly built homes eligible for a 20% equity loan from the government on top of their 5% deposit. The scheme has been extended until 2020 from its original 2016 end date. The second phase, which started in the autumn of 2013, guarantees a portion of a buyer's mortgage of new and existing homes and hasn't so far been extended beyond its current end date of 2016.
On the whole, Taylor Wimpey said it has benefited from an increase in sales prices and sales rates in not only London but in other markets outside the capital.
The company said its total order book, excluding completions to date and joint ventures, is at an "optimal level", with reservations averaging approximately five to six months ahead of completions, representing 7,587 homes compared with 7,101 homes a year earlier.
In turn, the total order book value increased 26% to GBP1.58 billion at the end of June, compared with GBP1.26 billion a year earlier.
In Spain, Taylor Wimpey said the housing market remains challenging, although the wider market environment is now stable.
It completed 20 homes in Spain, compared with 27 homes a year earlier, at an average selling price of EUR254,000, up from EUR216,000.
On the back of its performance Taylor Wimpey increased its maintenance dividend to 0.24 pence from 0.22 pence a year earlier.
As set out earlier this year, the company's dividend and cash strategy comprises two elements: a regular maintenance dividend, which is deliberately set as a through-the-cycle measure and which remains unchanged at 1% to 2% of net assets, and surplus cash returns at the appropriate time. The company said it will pay additional surplus cash return payments to shareholders over the medium term with reference to profitability, investment strategy and cyclical risk.
In February, when the company published its full-year results, Taylor Wimpey announced its intention to shell out GBP50 million to shareholders this year and a further GBP200 million in 2015, with further significant annual payments from 2016.
Taylor Wimpey shares were quoted up 0.8% at 115.50 pence Wednesday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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