02 March 2023
If you are covering Taylor Wimpey’s full year results, please see the following comment from Oli Creasey, equity research analyst at Quilter Cheviot:
“Taylor Wimpey’s full year results this morning are in-line with comments from other housebuilders – a very robust set of results for 2022, and a challenging, but manageable, outlook for 2023.
“What is particularly notable is the interplay between volumes and prices. Taylor Wimpey has indicated that sale prices are likely to remain firm despite recent house price index evidence, with an average price for private completions of £367k – equal to the average over H2’22. However, the company also guided to a significant drop in volumes to a range of 9,000-10,500, a fall of around -30% year-on-year. That equates to a weekly sales rate of 0.5-0.7x, and suggests further falling confidence amongst buyers given the sales rate for February was 0.66x, at the top end of this range. Likewise, it suggests that analyst consensus figures, which are currently forecasting 11,000+, are too high and will be downgraded this morning.
“The sales price is likely influenced by the level of reservations made prior to completion, which is lower than last year but still equal to over 8,000 homes / £2.2bn. Crucial to Taylor Wimpey’s strategy will be replacing these reservations for next year and at least maintaining or growing sales rates to more normalised levels.”
