3 August 2022
If you are covering Taylor Wimpey’s latest results, please find a comment from Oli Creasey, property research analyst at Quilter Cheviot:
"Taylor Wimpey’s half year results show a company in good health. The number of homes sold in the period is lower than the equivalent H1’21, but that itself was an exceptional period of recovery, and is arguably not a fair comparison. Putting today’s results against H1 2019, the completions level is +4% higher. We believe these results are slightly ahead of market expectations.
"The most crucial figure in our view is the operating margin, which has grown to over 20% in the period (vs 19.3% in 2021, 18.0% in 2019). Taylor Wimpey has made it a medium term goal to grow this margin to around 21-22% and appears to be well on the way to achieving this sooner rather than later. The average selling price of a TW home has grown +3.1% in the period, and while build cost inflation has had an impact on returns, the growth in selling prices has fully offset that increase.
"Management continues to have a positive outlook, noting that mortgage availability (at attractive rates) remains high, as does customer interest. We note that the private sales rate in July is relatively low, but it is unclear if this is a seasonal issue or a sign of things to come. We suspect the former given TW has indicated that they have fewer homes ready for sale than usual, simply due to timing and the forward sales rates remain high, with almost 90% of 2022 sales already agreed. However, we will be watching closely for any indication of shrinking volumes from TW and other housebuilders."
