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(Alliance News) - Taylor Wimpey PLC said Wednesday profit in the first half of 2019 dipped slightly despite revenue growth due to higher sales costs, while the homebuilder hiked its interim dividend and announced a special payout in 2020.
Shares in Taylor Wimpey were down 6.2% at 165.65 pence on Wednesday, making the stock the worst performer in the FTSE 100.
For the six months to the end of June, the FTSE 100-listed housebuilder reported a pretax profit of GBP299.8 million, down 0.4% from GBP301.0 million.
Operating profit for the period was down 9.4% at GBP311.9 million from GBP344.3 million, due to higher build costs and Taylor Wimpey's geographic mix.
Revenue, however, grew by 0.8% to GBP1.73 billion from GBP1.72 billion the prior year, as the number of completions rose to 6,541 homes from 6,497 year-on-year. The average selling price on private completions increased by 2.0% to GBP301,000 from GBP295,000.
Taylor Wimpey's order book as at June 30 was up 10% to 10,137 homes from 9,241 as at July 1 in 2018, increasing the order book's value to GBP2.37 billion from GBP2.18 billion.
Taylor Wimpey declared an interim dividend of 3.84 pence per share, up 57% from 2.44p the year before. For 2019, the housebuilder is expected to pay a total dividend of 18.34 pence per share, comprising ordinary and special payouts.
In addition, the group announced a special dividend for 2020 of GBP360 million, of 11.0 pence per share, to be paid in July of that year, subject to shareholder approval. For 2020, the total dividend is expected to be worth GBP610 million, or 18.6p per share.
Looking ahead, Taylor Wimpey expects its performance for 2019 to be in line with forecasts, with volumes for the year set to be higher than in 2018 but in an environment with flat pricing and increased build cost pressure, with margins to be lower.
For the year, build cost inflation is anticipated to be 5%, up from 3.5% in 2018.
"We have made good progress in the first half against our long term strategy, underpinned by our continued commitment to our customers, build quality and employee engagement. We delivered a record sales rate in the first half as we saw strong customer demand for our homes in a stable market and the success of our strategy to build more homes on our larger sites coming through more quickly than anticipated," said Chief Executive Officer Peter Redfern.
"Despite wider political uncertainty, conditions for the housing market continue to be supportive with good affordability and access to finance. We have not seen any meaningful change in customer confidence, with positive underlying metrics and forward indicators. We expect full year results for 2019 to be in line with expectations," Redfern added.