27 April 2023
If you are covering Taylor Wimpey’s latest trading update, please see the following comment from Oli Creasey, equity research analyst at Quilter Cheviot:
“Taylor Wimpey’s Q1 statement is another sign of resilience in the housebuilding market, following a similar tone from Persimmon yesterday.
“The company’s sales rate figure has increased to 0.75x, still below levels from a year ago, but improved from the H2’22 equivalent of 0.48x. The company has reiterated guidance of 9,000-10,500 completions in the year. That number may prove to be conservative – the Q1 sales rate, combined with the 259 outlets open at year end correlates to an annual sales figure of over 10,000 homes, and a stable operating environment could see this improve further. It is also worth noting that the guided volume is higher than the equivalent figure for Persimmon, historically the second largest volume builder on the stock market (after Barrett).
“Management report that build cost inflation is still high but coming down from the 9-10% figure last reported. They are also targeting £19m of cost savings, although this will come at an £8m cost in 2023 (equivalent to c. 2% of 2023 forecast EBIT). Despite this the company intends to maintain dividend growth, keeping to the stated policy and paying 4.78p next month (+8% year-on-year).”
