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(Alliance News) - Taylor Wimpey PLC on Wednesday painted an optimistic outlook as it reported a fall in profit for last year on the back of now-abating higher mortgage rates which had impacted affordability.
The Buckinghamshire, England-based housebuilder said pretax profit declined 43% to GBP473.8 million in 2023 from GBP827.9 million a year prior.
Revenue fell 21% to GBP3.51 billion from GBP4.42 billion. Cost of sales decreased 15% to GBP2.80 billion from GBP3.29 billion.
Taylor Wimpey said it finished 2023 with 237 UK outlets, down 8.5% from 259 at the end of 2022.
The company highlighted: "Higher than expected inflation in the second quarter led to rate increases culminating in the base rate rising to 5.25%, well above initial market expectations. Whilst remaining high compared to recent years, mortgage rates started to fall towards the end of the year."
Despite the contraction in profit and revenue, Taylor Wimpey increased its final dividend by a penny to 4.79 pence per share from 4.78p, bringing the total payout to 9.58p for 2023, up 1.9% from 9.40p for 2022.
Commenting on Monday's report from the UK Competition & Markets Authority, which is investigating an under-delivery of homes by construction companies including Taylor Wimpey, the company said:
"Taylor Wimpey welcomes the CMA's final report, published on 26 February 2024, from its housebuilding market study with its focus on improving the planning system, adoption of amenities and outcomes for house buyers. Taylor Wimpey notes the new investigation opened by the CMA under the Competition Act 1998, and we will cooperate fully in relation to this."
Looking ahead,Taylor Wimpey cited "encouraging signs of improvement" such as reduced mortgage rates positively impacting affordability and confidence in the firm's customer base. However, it cited significantly reduced land approvals over the last 18 months, adding that the constraining impact of planning on site openings in the UK is unlikely to abate in the near-term future for the sector.
"We are well positioned for growth from 2025, assuming supportive market conditions," the company said.
Chief Executive Officer Jennie Daly said: "While the planning environment remains challenging, we have a high-quality, well-invested landbank and a strong financial position which underpins our ability to provide investors with a reliable income stream via our differentiated ordinary dividend policy. Looking ahead we are well-positioned in an attractive market, with significant underlying demand for our quality homes and are poised for growth from 2025, assuming supportive market conditions."
Taylor Wimpey shares were down 2.8% to 136.60 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News slot editor
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