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LONDON (Alliance News) - Taylor Wimpey PLC said Tuesday profit in the first half increased as the homebuilder set aside a GBP30.0 million exceptional provision to replace flammable building cladding similar to that found on Grenfell Tower in London.
The FTSE 100-listed homebuilder's pretax profit in the six months ended June increased 47% to GBP301.0 million from GBP205.0 million the previous year.
The company's first-half revenue decreased 0.4% to GBP1.72 billion from GBP1.73 billion the year before. Revenue was down as completions in the first quarter were hurt by poor winter weather in the UK.
Taylor Wimpey completed a total of 6,497 homes, down 2.2% from the 6,648 completions in the first half of 2017. The house builder did see an increase in the UK private average selling price to GBP295,000 from GP287,000.
The company increased its UK order book to 9,241 homes, up from 8,741 homes the year before. The value of its order book has increased to GBP2.18 billion from GBP2.11 billion.
Taylor Wimpey also said that it will set aside GBP30 million to replace aluminium composite material cladding - which is similar to the material used on Grenfell Tower, at which a fatal fire spread rapidly due to the flammable cladding.
The housebuilder said: "In light of the Grenfell tragedy in June 2017, we completed a review to identify all legacy and current buildings with aluminium composite material cladding."
Taylor Wimpey said it will support customers "both financially and practically" with removal and replacement.
The company said: "We have taken this decision for buildings constructed recently because we believe that it is morally right, not because it is legally required."
Taylor Wimpey is increasing its interim dividend 6.1% to 2.44 pence per share from 2.30 pence per share. From 2019, the company is increasing its dividend policy to about 18.3 pence per share - representing 7.5% of the company's assets.
The homebuilder will pay a special dividend of GBP350 million, about 10.7 pence per share, in July 2019. Up from the GBP340 million, about 10.4 pence per share, paid in July 2018.
Looking ahead, Taylor Wimpey said it remain on track to deliver its 2018 expectations. Despite the slow down in completions in the first quarter, the company "catch up" in construction has progressed well.
The housebuilder believes that underlying demand will be above supply for the foreseeable future.
Chief Executive Pete Redfern said: "As employment prospects remain positive and mortgage availability is good, customer demand for our homes has been strong in spite of some wider macroeconomic uncertainty. With a strong order book in place, we are confident in our prospects for the remainder of the year and looking further ahead.
"We have a great platform in place as we roll out our new strategy for customer centred growth, which means taking a proactive approach to every aspect of our operations and becoming a more agile, focused and innovative business.
"Improving the efficient use of our land, and improving all key processes over the next five years, will enable us to deliver more homes and a high-quality product and service to our customers and communities and increased value for shareholders."
Shares in Taylor Wimpey were trading flat on Tuesday at 172.10 pence each.
