Last checked at 17 Apr 2014 07:00
17 April 2014
Taylor Wimpey plc
Interim management statement
Strong first quarter
Taylor Wimpey plc is holding its Annual General Meeting (AGM) at 11:00 today in London, where the following comments will be made regarding current trading, financial performance and the outlook for the financial year, which covers the period from 1 January 2014 to today.
Pete Redfern, Chief Executive, commented:
"The UK housing market remains buoyant and our customers continue to benefit from a more accessible and affordable mortgage market. In this improving market, we continue our investment in delivering high-quality homes and creating communities in places where people want to live. We have made a particularly strong start to the year, working successfully with local communities and authorities to convert c.4,800 plots from our strategic pipeline.
With our strategy set, and our disciplined processes embedded, we remain confident of delivering further improvement in all our key financial objectives and maximising shareholder returns across the cycle."
UK current trading
The positive momentum in the UK housing market has continued since our results in February and we have had a strong first quarter, with continuing improvement across all regions. This market has been driven by better access to mortgages at more affordable rates, which has improved with increased competition between mortgage providers. This, together with the extension of Help to Buy, has given more customers both the confidence and the ability to step onto or move up the housing ladder.
We have experienced a more traditional seasonal pattern, with a strong spring selling season, where we have achieved an average private net reservation rate of 0.75 sales per outlet per week for the year to date (2013 equivalent period: 0.66). We anticipate average sales rates for the year as a whole to be slightly ahead of 2013. Cancellation rates are historically low at 10.0% (2013 equivalent period: 13.7%). During the period we worked with over 1,600 customers to secure a home using Help to Buy.
We have increased our total order book volume by 13% to 8,139 homes from the equivalent point last year (2013 week 15: 7,190 homes), excluding legal completions to date, and by 23% from the year end. We have also increased the total order book value by 33% to approximately £1.6 billion from the equivalent point last year (2013 week 15: approximately £1.2 billion) and by 33% from the year end. Average selling prices of homes in the total private order book have increased by c.22% from the equivalent point last year to approximately £248.9k (week 15 2013: £204.8k). Both the margin and average selling price of homes in the order book have also increased from the end of 2013.
Land portfolio, planning and outlets
Whilst land prices have started to rise in absolute terms, and in line with the general housing market increase, we are still able to acquire land at margins above historic norms and we have therefore remained a net buyer of land during the period. At the end of March, our short term landbank stood at c.73,000 plots, following the conversion of c.4,800 plots from our strategic pipeline. This strategic land pipeline of c.110,000 potential plots, combined with the strength and quality of the short term landbank, allows us to be highly selective, driven by opportunity, not necessity, and crucially to retain our discipline in a more competitive environment.
Inevitably the better market has resulted in ongoing pressure on build costs and labour, particularly in some geographic areas, however this continues to be held at a manageable level.
We are currently operating from 303 outlets, compared to 313 at this time last year (excluding joint ventures).
Group financial position and dividends
Net debt remains low at £130 million as at 31 March 2014 (31 March 2013: £195 million).
We will be paying 0.47 pence per share (2012: 0.43 pence per share) as a final maintenance dividend giving a total for 2013 of 0.69 pence per share (2012: 0.62 pence per share), subject to shareholder approval at today's AGM.
As we previously announced, we will also be paying a special cash dividend on 3 July 2014 of 1.54 pence per share.
Board changes
As announced on 26 February 2014, following the conclusion of the AGM today, after nine years dedicated service and in line with corporate governance best practice, Tony Reading MBE will stand down from the Taylor Wimpey plc Board as a Non Executive Director.
Outlook
We remain confident that our disciplined strategy will deliver at least 200 to 300 basis points of operating margin improvement in 2014, and further improvement in 2015 and beyond. As we look longer term, we remain focused on delivering quality in every sense by growing the business in the right way to a sustainable level, focusing in each of our regional markets on the locations and products that our customers value and maximising shareholder returns through the cycle.
-Ends-
For further information please contact:
Taylor Wimpey plc Tel: +44 (0) 7826 874461
Pete Redfern, Chief Executive
Ryan Mangold, Group Finance Director
Debbie Sempie, Investor Relations
RLM Finsbury Tel: +44 (0) 20 7251 3801
Faeth Birch
Sarah Heald
Notes to editors:
Taylor Wimpey plc is a UK-focused residential developer which also has operations in Spain.
Our vision is to become the UK's leading residential developer for creating value and
delivering quality.
For further information, please visit the Group's website:
www.taylorwimpey.co.uk