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LONDON (Alliance News) - Taylor Wimpey PLC on Wednesday said it expects its profitability for 2016 to come in at the upper end of market consensus, after housing completions rose over the year.
The FTSE 100 housebuilder said it continued to see good demand for housing and solid trading into the second half of the year, ended December 31, with completion numbers rising by 4.0% year-on-year to 13,881 from 13,341 the prior year.
Of these, 2,663 were affordable homes, up from 2,509 a year earlier. The group said its net private reservation rate for the year was 0.72 homes per outlet per week, compared to 0.73 homes per outlet per week the prior year, and its cancellation rates remained low at 13%. A year earlier, its cancellation rate was 12%.
Taylor Wimpey said its average selling price increased by 11% year-on-year to GBP255,000 from GBP230,000 a year earlier.
The housebuilder said it ended 2016 with an order book valued at GBP1.68 billion, down from GBP1.78 billion a year earlier. Taylor Wimpey said this slight decline came due to a small fall in the average selling price within its order book after a number of high-value central London completions took place in December 2016.
Taylor Wimpey said its order book represents 7,567 homes, up from 7,484 homes a year earlier.
The group expects to report an improved operating profit margin of 20.8%, from 20.3% a year earlier, and a return on net operating assets of over 30%, compared to 27.1% a year earlier.
Its net cash at year-end was GBP365.0 million, up from GBP223.3 million a year earlier, and Taylor Wimpey reiterated its medium-term target of paying a total of GBP1.30 billion of dividends in cash to shareholders over the period 2016 to 2018.
"We are pleased to report good progress in 2016, with an increase in housing completions and robust trading despite wider macroeconomic uncertainty," said CEO Pete Redfern.
"In a market characterised by solid fundamentals, we ended the year with a strong forward order book and made good progress against our enhanced medium term targets. We expect to deliver full-year profitability at the upper end of market consensus. Looking ahead, we remain confident that our disciplined strategy will enable us to continue to deliver value over the long term," Redfern added.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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