Taylor Wimpey Trading Update

Tuesday, 13th November 2018 11:00 - by Rajan Dhall

Today we have had a trading update from one of the UK's largest homebuilders Taylor Wimpey. The housing market remains pretty robust despite uncertainties but while low-interest rates are still around and the Help to Buy scheme demand will continue to be strong.

Highlights:

• Sales rates for the year to date have remained strong at 0.81 sales per outlet per week (2017 equivalent period: 0.81)
• Taylor Wimpey have achieved a very good sales rate of 0.77 in the second half of the year to date (2017 equivalent period: 0.71)
• The Co. has operated on an average of 275 outlets in the year to date (2017 equivalent period: 290) and have started to increase the number of build teams on certain larger sites as we target increased efficiency. Current outlets stand at 261 (2017 equivalent period: 285), slightly lower than expected, as delays have impacted outlet opening timing.
• Their current total order book, excluding joint ventures, represents 9,783 homes, which is 12% above last year (2017 equivalent period: 8,751). This order book stands at c.£2.4 billion (2017 equivalent period: c.£2.2 billion), an increase of 9%. This is at the upper end of our expectations at this stage
• Build costs are expected to increase 3-4% this year, as previously indicated.

All in all, it seems like a pretty solid performance from Taylor Wimpey. Although, I am not too sure that traders and investors will like the fall in current and operated average outlets along with the rise in building costs, therefore, I think we could be heading to some support levels.

Looking at the daily chart it's clear to see recent price action on the candles has been bearish. this comes despite the OBV indicator ticking higher and higher. This would indicate that despite the move lower in the share price someone is finding value at these low levels. Despite this, a move back into the channel area (lower) seems likely but be cautious as it is not the worst trading update I have ever seen. Longer term I am afraid things will depend on outside political factors and building costs, but from a technical standpoint, anything under 160p looks like good value based on the volume profile indicator.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.