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(Alliance News) - Taylor Wimpey said Monday its trading remains resilient, and the quick recovery of the UK housing market is "testament" to the underlying strength of demand and supportive lending backdrop.
Taylor Wimpey shares were up 9.4% in early trade on Monday.
The housebuilder noted that customers have benefited from the short-term extension to the current phase of the UK government's Help to Buy scheme and the Stamp Duty Land Tax holiday.
Taylor Wimpey said its order book stands at GBP3.0 billion, up 11% from GBP2.7 billion at the same time last year, with the private average selling price in the order book ahead of 2019 levels. The order book represents 11,530 homes as at November 1, up 10% from 10,486 homes last year.
Turning to shareholder returns, Taylor Wimpey reiterated that it expects to recommence ordinary dividend payments in 2021, starting with the payment of a 2020 final dividend. It will review a special dividend in 2021 for payment in 2022.
Looking ahead, Taylor Wimpey expects the UK housing market to support robust sales rates and for prices of new build homes also to remain supportive. It now expects 2021 completions to be between 85% to 90% of 2019 levels.
Assuming the market remains broadly stable, Taylor Wimpey currently expects to deliver operating profit in 2021 materially above the top end of the current consensus range. The current company compiled consensus expectation for 2021, is for operating profit in the range of GBP359 million to GBP626 million.
For 2020, the current company compiled consensus expectation is for operating profit in a range between GBP242 million to GBP292 million.
"We have made good progress in the second half of the year to date, maintaining a robust sales rate and building a strong forward order book. Looking ahead, we are on track to deliver full year 2020 results towards the upper end of market expectations and with strong operational momentum and positive forward indicators, our confidence in 2021 has increased. As a result, assuming the market remains broadly stable, we expect to deliver 2021 operating profit materially above the top end of the current consensus range," the company said.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.5% at 5,998.31
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Hang Seng: up 1.2% at 26,016.17
Nikkei 225: closed up 2.1% at 24,839.84
DJIA: closed down 66.78 points, or 0.2%, at 28,323.40
S&P 500: closed up 4.30 points higher to 11,895.23
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GBP: up at USD1.3192 (USD1.3172)
EUR: unchanged at USD1.1885 (USD1.1887)
Gold: firm at USD1,954.63 per ounce (USD1,952.40)
Oil (Brent): up at USD40.37 a barrel (USD39.66)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
1000 EST US employment trends index
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UK Prime Minister Boris Johnson will proceed with his controversial Brexit bill despite US President-Elect Joe Biden having previously warned the UK over the draft legislation. The prime minister told broadcasters, after congratulating Biden and Vice President-Elect Kamala Harris on their victory, that he intended to push ahead with the Internal Market Bill, with peers due to vote on it this week. The bill would override clauses in the Withdrawal Agreement relating to Northern Ireland and the government has admitted it breaks international law. Meanwhile, EU chief negotiator Michel Barnier is in London this week for talks with his UK counterpart David Frost as he seeks to "find an agreement that respects the interests and values of the EU and its 27 Member States". Biden, who has Irish heritage, in September warned that the Good Friday Agreement cannot be "a casualty of Brexit" and said a UK-US trade deal would be dependent on the peace terms being upheld.
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The US has set another record for the daily number of coronavirus cases. The country reported more than 126,000 positive cases and more than 1,000 deaths from Covid-19 on Saturday, according to the most recent data from Johns Hopkins University. It marked the fourth day in a row that new cases topped more than 100,000 as the country has broken its own record for daily cases with nearly every passing day this week. The seven-day rolling average for daily new deaths rose over the past two weeks from 801 on October 24 to 930 on November 7, the university said. There have been more than 9.8 million cases and more than 237,000 deaths from the virus in the US since the pandemic started.
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BROKER RATING CHANGES
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HSBC RAISES SHELL TO 'BUY' (HOLD) - PRICE TARGET 1175 (1160) PENCE
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SHORE CAPITAL CUTS RSA INSURANCE TO 'HOLD' ('BUY') - TARGET 630 PENCE
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JEFFERIES CUTS RSA INSURANCE TO 'HOLD' ('BUY') - TARGET 650 (600) PENCE
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RBC CUTS ABCAM TO 'SECTOR PERFORM' ('OUTPERFORM') - TARGET 1500 PENCE
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COMPANIES - FTSE 100
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Bunzl said it will acquire SP Equipamentos, a personal protection equipment distributor based in Sao Paulo, Brazil, for an undisclosed sum. Completion of the acquisition is expected to take place at the end of November. In addition, Bunzl said it has completed the acquisition of ICM, a distributor of personal protection equipment to a variety of customers in Denmark. "Growth through acquisitions continues to be an important part of the strategy of the group, and I am pleased that year to date our committed acquisition spend totals more than GBP400 million. Our acquisition pipeline remains promising with a number of discussions ongoing," said Chief Executive Frank van Zanten.
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National Grid could face being split in two as officials explore ways in which its electricity division could be moved into an independent body, the Sunday Telegraph reported. UK government officials and regulators are considering breaking up the electricity and gas utility as part of a wide-ranging restructuring of the energy industry aimed at facilitating the country's aim of reaching zero-carbon emissions within the next thirty years, the newspaper said.
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COMPANIES - FTSE 250
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Canadian security firm GardaWorld extended its offer for peer G4S amid a bidding war for the UK outsourcer. GardaWorld said its cash offer for G4S now will remain open for acceptance until the afternoon of November 28. Last week, US-based Allied Universal fired what could be a starting shot in a bidding war for the UK security firm. Allied failed to convince the G4S board, however. The directors of G4S last Tuesday rejected a GBP3.25 billion bid, saying it "significantly undervalues" the business. The "at least" 210p per share bid gives Allied Universal the edge over its Canadian rival suitor GardaWorld, which had a 190p bid rejected by G4S. "We are extending our offer for G4S because, despite its past problems and uncertain future, we believe we can turn the business around. We can give G4S shareholders the certainty of cash today, not jam tomorrow. We believe G4S is misrepresenting its prospects under the current management team. It is time they tell shareholders and employees the truth," GardaWorld CEO Stephan Cretier said on Monday.
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TP ICAP said total revenue declined by 19% in the third quarter to GBP388 million from GBP478 million a year before. Global broking revenue was down 19% and Energy & Commodities by 15%, but Data & Analytics revenue was up 9%. "TP ICAP's broking revenue performance directly reflects transaction activity in the key asset classes in which we are active and was broadly in line with exchange-traded volumes in these segments," the company explained. Added CEO Nicolas Breteau: "Over a nine-month period of substantial economic dislocation, TP ICAP's business has been resilient. We have implemented a targeted cost efficiency programme that will provide further support to our earnings power in an operating environment that remains uncertain. TP ICAP has a clear strategy of electronification, liquidity aggregation and diversification, on which we have made meaningful progress over the course of 2020, and which our proposed acquisition of Liquidnet will accelerate."
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Monday's Shareholder Meetings
Angus Energy PLC - GM re equity fundraise
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By Tom Waite; thomaslwaite@alliancenews.com
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