Taylor Wimpey (LSE: TW), the homebuilding developer with operations in the UK and Spain, today released results for the six months to 30 June 2013 showing revenues increasing 11% to £1.0bn, operating profits up 34% to £132m and profits from continuing operations before exceptional items jumping 85% to £87m. Without the benefit of the 2012 tax credit and financing rebate of £82m, overall profits amounted to £136m — a gain of 5%.
Revenues rose following a 2% increase in completions coupled with an average selling price up 7% to £188k. The operating margin was up 230 basis points to 14%, compared with 11% in 2012. Taylor Wimpey has an order book of 7,378 homes (as at 28 July 2013) valued at £1.3bn, and are nearly 90% sold for 2013. Full-year results are now expected to be at the upper end of expectations.
The reduction of net debt from £135m to £68m is also encouraging, as is the board’s decision to increase the interim dividend by 16% to 22 pence per share.
Pete Redfern, chief executive, commented:
“During the first half of 2013, there has been meaningful improvement in the housing market, with more positive consumer sentiment, a more available and affordable mortgage market, and the presence of Government mortgage schemes, all adding to a favourable outlook. Our business is ideally positioned to perform well in this environment with a strong land position and a very effective housebuilding operation. We continue to open all new outlets with implementable planning permission.”
Taylor Wimpey is confident on the outlook for the next few years. There is a high level of demand for new homes, which the house builder will hope can convert into continued strong sales figures. The implementation of a new IT system will also help to alleviate glitches in the buying process and lead to cost savings. Overall, the prospects for growth at Taylor Wimpey are considerable.
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> Barry does not own shares in Taylor Wimpey.
