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(Alliance News) - Taylor Wimpey PLC said Thursday it is "pleased" with its performance in the second half so far and remains on track to deliver annual results in line with previous guidance.
"We have been building a strong forward order book for 2022 and continue to see good demand for our homes, supported by a positive market backdrop. Despite well-publicised industry supply chain pressures, we are managing our supply chain effectively and are benefiting from our scale and strong partner relationships. We continue to see house price inflation fully offsetting build cost inflation," Chief Executive Pete Redfern said.
The High Wycombe, Buckinghamshire-based housebuilder said its business has begun to return to normal pre-pandemic levels, with sales from its outlets being comparable to 2019 levels.
In the second half of the year so far, Taylor Wimpey has sold 0.91 home per outlet, compared to 0.93 two years ago and 0.76 in 2020.
Cancellation rates, which hit 21% a year ago, have returned to a more normal 14%.
The order book stood at GBP2.8 billion on November 8, down from GBP3.0 billion at the same point in 2020 but up from GBP2.7 billion in 2019.
In the second half to the end of October, Taylor Wimpey added 5,431 plots, up versus 3,663 the year before. At October 31, the housebuilder's short-term landbank stood at about 84,000 plots versus 82,000 at July 4.
The UK housebuilding industry has been under pressure from price rises and shortages of materials, as well as a shortage of haulage drivers, Taylor Wimpey noted.
However, the company said there has been an "easing in certain areas" and it expects conditions to gradually improve.
CEO Redfern added: "Looking ahead, market conditions remain supportive, and with the benefit of our strong land position we are well placed to deliver against our medium term targets."
Taylor Wimpey expects modest growth in completions in 2022, followed by more significant outlet driven growth in 2023. In 2020, it recorded 9,799 house completions.
Matt Britzman, equity analyst at Hargreaves Lansdown, said: "The UK housing market continues to build on its recent strength, with demand and mortgage availably remaining strong. Good news for Taylor Wimpey which continues to expand its land bank following a buying spree in 2020 when others closed their chequebooks. Of course, that carries additional risks should demand or volumes fall, but it's a move that's paying off so far.
"News that rising house prices are continuing to offset build cost inflation is in line with commentary from competitors and is positive news for the sector. On the flip side, volumes could come under pressure if prices keep rising, bad news for any housebuilder especially one that's not been scared to tie up large sums of capital in land. But, for now at least, Taylor Wimpey looks to be in a good position to build on the abundance of buyers."
Shares in Taylor Wimpey were up 0.2% in London on Thursday at 158.38 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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