31st Jul 2024 09:55
(Alliance News) - Taylor Wimpey PLC on Wednesday said it is on track to meet full-year guidance as the company emerges from a more challenging first half.
The Buckinghamshire, England-based house builder said in the first half that ended June 30, pretax profit fell 58% to GBP99.7 million from GBP237.7 million the previous year.
Revenue reduced 7.3% to GBP1.52 billion from GBP1.64 billion, while cost of sales fell 4.5% to GBP1.23 billion from GBP1.28 billion.
Taylor Wimpey raised its interim dividend for the period by 0.2% to 4.80 pence per share from 4.79p, while adjusted net debt has increased 34% to GBP89.6 million from GBP66.9 million.
"There was an encouraging start to the year with good demand in the traditionally strong Spring selling season and conditions remained relatively stable in the second quarter. However, it is clear the delay in interest rate cuts and comparatively high mortgage rates continue to have some impact on market transactions.
"We continue to drive operational efficiencies to maximise value whilst at the same time investing in areas crucial to the long term efficiency and sustainability of the business, including in our people, IT, timber frame and zero carbon ready homes," Taylor Wimpey said.
Excluding joint ventures, 4,512 UK homes were completed in the first half, down 7.0% from 4,854. Included among these new builds were 1,004 affordable homes, equating to 22% of total completions.
At period end, the net book value of the company's UK short-term landbank stood at GBP2.7 billion, encompassing 78,678 plots. Meanwhile, Taylor Wimpey's strategic pipeline covers approximately 140,000 potential plots.
Elsewhere, the Spanish business, which primarily sells second homes to European and international customers, possesses a landbank totaling 3,518 plots.
The Spanish operation developed 142 homes in the first half, down 38% from 228 previously. However, the total order book has risen 46% to 657 homes from 451 homes last year.
Chief Executive Jennie Daly said: "Looking to the second half, our performance to date means we now expect to deliver 2024 full year UK completions towards the upper end of our previous guidance range of 9,500 to 10,000 [compared with 10,438 before] and group operating profit in line with current market expectations."
The company expects to achieve an operating profit of GBP416 million, which would reflect a 12% reduction from GBP470.2 million reported in 2023.
"With the benefit of our high-quality landbank and strong financial position, we are well positioned for growth from 2025, assuming supportive market conditions," Daly added.
Taylor Wimpey shares were up 1.9% to 161.50 pence each in London on Wednesday morning.
By Elijah Dale, Alliance News reporter
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