2nd Mar 2021 08:57
(Alliance News) - Taylor Wimpey PLC on Tuesday noted a good recovery in the second half of a "very challenging" year.
Shares in Taylor Wimpey were up 3.1% at 171.75p in London on Tuesday morning, making the stock the best performer in the FTSE 100.
The FTSE 100-listed housebuilder reported 2020 revenue of GBP2.79 billion, down sharply from GBP4.31 billion in 2019 due to a reduction in completions. This was broadly expected by analysts, with consensus standing at GBP2.73 billion.
House completions fell 39% to 9,799, primarily due to site shutdowns in the second quarter due to the pandemic, while pretax profit slumped to GBP264.4 million from GBP835.9 million in 2019. Consensus expectations had pretax profit from continuing operations before exceptional items reach GBP265.0 million and total completions at 9,544 homes, a 41% drop from 16,024 in 2019.
"After an unusual and volatile year, our 2020 results are in line with market expectations," said Taylor Wimpey.
The company added that it will be resuming ordinary dividend payments by returning GBP151 million, or 4.14 pence per share, as a final payout for 2020. The consensus had the dividend at 2.8 pence per share. The firm cancelled its 2019 final dividend and a planned special payout.
"We are not proposing to return excess capital in 2021. We will review the level of excess capital and potential return in respect of 2021 at the time of the 2021 full year results in February 2022, for payment in 2022," the company said.
Despite the issues caused by the pandemic, Taylor Wimpey saw its operating performance bounce back "strongly" in the second half of 2020, with build capacity returning to near normal levels and "strong" sales. Additionally, the 2021 selling season has started well.
"In 2021, assuming the market remains broadly stable, we expect to deliver 85% to 90% of 2019 volumes and make further progress towards our medium term operating margin target of approximately 21% to 22%," the company said.
"We are confident in the medium term performance of the housing market and therefore accelerated our land purchases from May 2020 as high-quality land became available at attractive rates. We are now focusing on driving efficiencies across the business, the roll out of our new house type range and implementing our ambitious new environmental strategy. The UK housing market has been resilient and continues to reinforce our confidence in our outlook," said Chief Executive Pete Redfern.
By Zoe Wickens; [email protected]
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