2 August 2023
If you are covering Taylor Wimpey’s latest results please see the following comment from Oli Creasey, equity research analyst at Quilter Cheviot:
"Taylor Wimpey’s half year results show a resilience that is likely to surprise the market on the upside this morning.
"The company has exceeded its own guidance for weekly sales rate – reporting 0.71 sales per week per outlet. Previously, the company had suggested this would be between 0.5-0.7x for the full year 2023, and would be weighted towards the second half, so to exceed it in H1 is an achievement. Management have increased and narrowed their FY guidance for completions to between 10,000-10,500 homes in the full year.
"The average sale price of a Taylor Wimpey home grew +7% year-on-year and +2% in the past six months, based partly on a change in types of houses sold, but is also a demonstration of pricing discipline by the company, particularly with volumes as strong as they were. The operating margin fell -6% to 14.4%, but we would suggest this is better than expected given the operating environment, particularly cost pressures, which are now moderating to around 6% annualised cost inflation.
"It is notable that the company is remaining in a broadly steady state – the net cash position is largely unchanged, as is the size of the landbank, despite the operational pressure being felt. The company has announced a +4% increase to the November dividend, in line with the existing policy to pay out 7.5% of net assets each year, equating to an annual dividend yield of over 8%.
"The UK housing market remains under pressure. However, Taylor Wimpey is demonstrating that it can still function effectively under this pressure."
