Good start to year
Taylor Wimpey building more than for six years
Construction firm Taylor Wimpey said it was building more homes than at any point in the last six years and delivering a record operating margin.
In a trading update Pete Redfern, chief executive, said: “We have delivered a strong trading performance in 2015, in a positive housing market.
“We are confident that the principles we are operating to will deliver long term sustainable value across the housing cycle, and we remain focused on working with communities and our customers, suppliers and employees to drive continual improvement in the quality and consistency of our operational business.
“Against the backdrop of a positive housing market in 2015, which continued to strengthen into the second half of the year, we have driven an improved financial performance and delivered a healthy increase in completions.”
In 2015, total home completions increased by 7% to 13,341, including the firm’s share of joint venture completions (2014: 12,454).
During 2015, it delivered 2,509 affordable homes (2014: 2,178), equating to 19% of total completions (2014: 17%).
Net private reservation rate for 2015 was 0.73 homes per outlet per week (2014: 0.64).
Cancellation rates remained low at 12% (2014: 14%).
Average selling prices on private completions increased by 9% to £254k (2014: £234k), benefiting from our focus on better quality locations. Overall average selling price increased by 8% to £230k (2014: £213k).
“We ended the year with a record year end order book, which increased in value by 27% to £1.8 billion as at 31 December (31 December 2014: £1.4bn), excluding joint ventures.
This order book represents 7,484 homes (31 December 2014: 6,601 homes).
“We enter 2016 with 297 outlets (31 December 2014: 305) located in high-quality locations where people want to live.
“The short term land market remained disciplined throughout 2015, and we were able to invest in value creating opportunities at margins similar to those achieved in 2014. As at the end of December 2015, our short term landbank stood at around 76k plots, having successfully converted over 8k plots from the strategic pipeline into the short term landbank.”
The company said it will report an improved operating profit margin of over 20% (2014: 17.9%) and a return on net operating assets of over 25% (2014: 22.5%).
“We welcome the Government’s commitment to housing delivery which was demonstrated by the Autumn Statement, which placed housing at the centre of policy agenda. We look forward to evaluating the full detail when available around the Starter Homes initiative, in order to assess the investment required in skills and resources to deliver this scheme.
“We remain committed to delivering high-quality homes and sustainable shareholder returns across the housing cycle, whilst continuing to invest in improvements to our customer service processes.
“We start the year in an excellent position with a strong order book and a clear strategy which remains focused on long term delivery and sustainability. We remain confident that we will continue to demonstrate further progress throughout 2016, and against our medium term targets, delivering increased returns for our shareholders and embedding improvements to enhance our customers’ homebuying experience.”