Housebuilder Taylor Wimpey shrugs off inflation and rate rises to maintain profit targets off the back of the surging property market
- Taylor Wimpey order book at £2.97bn compared with £2.81bn a year ago.
- Trading statement outlined profits were in line with expectations
- The FTSE 100 firm will pay a final dividend of 4.44 pence per share on May 13
Britain’s third-largest homebuilder Taylor Wimpey has shrugged off inflation fears and rising interest rates to maintain its profit outlook.
The developer has profited from a surging property market and rising house prices and said that demand remained strong for new homes.
The company, headquartered in High Wycombe, said its order book stood at £2.97 billion as of April 17, compared with £2.81 billion a year ago, when the sector was supported by more government measures.
Britain’s third-largest homebuilder Taylor Wimpey has shrugged off inflation fears with the surging UK housing market helping it to boost profits
Taylor Wimpey shares rose 2.3 per cent to 131p today.
The FTSE 100 firm reiterated that it will pay a final dividend of 4.44 pence per share on May 13, up from 4.14 pence per share in 2020.
Looking ahead, Taylor Wimpey says its ‘mindful of the wider uncertainty caused by the conflict in Ukraine’ and other inflation pressure but its focus remains on ‘price optimisation, operational delivery and cost control’.
It remains optimistic on delivering an operating profit margin target of 21 per cent to 22 per cent in the medium term.
During the pandemic the company was aggressively buying land and it says that its ‘high-quality landbank’ is one of its ‘strategic differentiators’.
To date, it currently owns around 87,000 plots in the UK and there are 145,000 potential plots in the pipeline.
It also highlights its ‘early and proactive action in the immediate aftermath of the Grenfell tragedy to address fire safety and cladding issues’ in a bid to reassure customers.
While labour and material costs have increased in the housebuilding sector, Taylor Wimpey says strong house price levels and unprecedented customer appetite have helped it to offset these hikes.
This is in line with other UK homebuilders which have pointed to a resilient housing market, partly on robust demand for larger homes suitable for remote working from buyers who saved up during the pandemic as well as the availability of cheap loans, dispelling slowdown woes amid the growing costs of living.
Commenting on Taylor Wimpey’s buoyant results, the firm’s newly-appointed CEO Jennie Daly said: ‘Trading has continued to be strong, supported by a healthy market backdrop. We have also continued to make good progress against our strategic priorities, including driving growth in operating profit margin and outlet openings.
‘Demand for our homes remains strong, with the business well positioned to deliver further progress in 2022 and beyond.
‘The business is strongly positioned to deliver sector-leading growth and returns, and I am truly excited by the opportunities ahead.’