07 November 2024
If you are covering Taylor Wimpey’s trading update, please find comments below from Oli Creasey, property analyst at Quilter Cheviot:
“Taylor Wimpey has reiterated its guidance for 2024 volumes, aiming for the upper end of the 9.5k-10k range. The company also confirmed that sell-side expectations for FY24 profit are broadly accurate, with consensus EPS at 8.3p for 2024.
“The sales rate of 0.70x shows a significant year-on-year improvement but indicates a slight slowdown compared to Q2 (0.73x year-to-date). This is likely due to the traditionally slower summer season and uncertainty leading up to the October budget.
“Taylor Wimpey has chosen not to comment on cost inflation for 2025, likely to avoid the negative reaction Persimmon faced for suggesting rising costs. However, the absence of a comment does not imply the absence of inflation. The company’s vague outlook suggests a return to growth next year, assuming supportive market conditions, which are uncertain given the budget’s impact on mortgage costs.
“The company has lowered its net cash expectation for FY24 year-end by £50m, now anticipating a still healthy £500m. This reduction is attributed to bringing more land through the pipeline, a move that analysts will closely monitor.
“Increasing the amount of buildable land is crucial for Taylor Wimpey’s growth rates. The company has confirmed that the number of outlets it operates is shrinking, expected to be around 200 by year-end, a 15% decrease from last year. This reduction could limit growth potential next year, as there is a natural limit to the number of houses that can be sold per outlet.”
