16 January 2025
"Taylor Wimpey’s trading statement this morning deserves to be seen in a wider context. The headline completions figure of 10,593 homes shows a 2% fall year-on-year, which sits at odds with the recent equivalent figures for peers Persimmon and Vistry (both 7%). However, the completions figure is at the very top end of company guidance – the core, excluding joint ventures, completion figure of 9,972 was guided to be between 9,500-10,000, and is slightly ahead of analyst expectations.
"There are valid reasons that the sales volumes have not grown in line with peers. Notably, Taylor Wimpey has operates with 9% fewer sales offices open on average over the year. Despite this, the sales rate per outlet has increased by 21% to a relatively healthy 0.75x. This is compared to a long-term sector average of around 0.8-0.85x and is ahead of Persimmon’s 0.7x. We believe this is more reflective of the business’ health.
"It is also worth noting that the fall from peak volumes has been smaller for Taylor Wimpey versus its peers, so we shouldn’t be too surprised that the recovery is more sedate.
"Taylor Wimpey’s sales prices declined marginally by 1.5% year-on-year, again slightly behind peers. Management has noted that there is some weakness in pricing in the South of England, where affordability is most stretched, while prices in the North prices have been increasing. The 2025 order book is larger than last year, both in terms of volume and value, though management believes underlying pricing has fallen very slightly by 0.5%.
"Despite these headwinds, profitability remains relatively high, with management guiding to a 2024 gross margin of 19% down slightly from the 2023 figure of 20.4% and have reiterated previous guidance for the operating margin.
"The outlook for 2025 is robust based on the growing order book. Taylor Wimpey has noted an encouraging start to the year based on enquiry levels in the first two weeks but does also note that it is too early to read too much into this evidence."
