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(Alliance News) - Taylor Wimpey PLC said Thursday it expects to report a performance for 2020 in line with market expectations, and to return to paying dividends, despite a decline in home completions for the year.
For the year, total UK home completions including joint ventures fell by 39% to 9,609 from 15,719 the year before, which was due to the UK's national lockdown in the second quarter, which disrupted the FTSE 100 housebuilder's production capacity.
Taylor Wimpey said its net private reservation rate for 2020 was 0.76 homes per outlet per week, compared to 0.96 homes the prior year, while cancellation rates for the year reached 20%. This is above normal levels which are usually around 15%.
However, the overall average selling price increased by 7.1% year-on-year to GBP288,000 from GBP269,000, driven by a change in mix.
Taylor Wimpey ended 2020 with an order book of GBP2.68 billion representing 10,685 homes, up 23% from GBP2.18 billion the same date the year before, which reflected 9,725 homes.
As at December 31, the group's short term landbank stood at 77,000 plots, up from 76,000 plots, while its strategic land pipeline was 139,000 potential plots. So far, Taylor Wimpey has agreed terms on GBP1.3 billion of gross land purchases, comprising 93 sites and 22,600 plots, ahead of the group's normal rate of acquisition.
Covid-19 affected Taylor Wimpey's operations in Spain as well as the UK. In Spain, the group completed 190 homes in 2020 at an average selling price of EUR375,000, compared to 323 homes at an average selling price of EUR429,000.
Looking ahead, Taylor Wimpey expects to recommence ordinary dividend payout in 2021, starting with the 2020 final dividend. The group will review the special dividend in 2021 for payment in 2022.
Taylor Wimpey's construction sites in the UK will remain open, and aside from in Wales, the group's sales centres will also stay open for appointments. Despite the lockdown in January, interest levels remain high, and the group entered 2021 more than 50% forward sold for 2021 private completions.
Taylor Wimpey expects to report its 2020 results in line with expectations, with the average consensus expectations for operating profit at GBP293 million, reflecting a 66% drop from GBP850.5 million in 2019.
"Our 2020 results will be in line with market expectations. While operations were impacted by the shutdown period in the second quarter, the subsequent return to near normal construction capacity and continuing resilience of the UK housing market enabled sales and production to recover strongly towards the end of the year. We increased new investment in land in the second half of the year as high quality land became available at attractive margins," said Chief Executive Pete Redfern.
Taylor Wimpey will publish its annual results on March 2.
Shares in Taylor Wimpey were down 1.9% at 157.95 pence on Thursday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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