LONDON (Alliance News) - Taylor Wimpey PLC on Wednesday said the value of its order book declined marginally at the end of December from the prior year, but expects its profitability for 2016 to come in at the upper end of market consensus.
Shares in Taylor Wimpey were down 1.2% at 172.82 pence on Wednesday, though remain 49% above the low they hit in the week following the Brexit vote.
The FTSE 100 housebuilder said it ended 2016 with an order book valued at GBP1.68 billion, down from GBP1.78 billion a year earlier, despite a rise in the number of homes represented by the order book, to 7,567 homes, from 7,484 homes a year earlier.
Taylor Wimpey said this 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. These were included in the prior year's order book.
Alongside this, the number of outlets from which it is selling declined over the year to 285 outlets from 297 outlets the prior year.
However, Taylor Wimpey CEO Pete Redfern said of the update that "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, the CEO added.
The 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 came in slightly higher at 13% from 12% a year earlier.
Taylor Wimpey said its average selling price increased by 11% year-on-year to GBP255,000 from GBP230,000 a year earlier, and the average selling price of its private completions rose by 13% to GBP286,000 from GBP254,000 a year earlier.
This strong performance came "despite wider macroeconomic uncertainty", the group said.
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.
The group said the short-term land market continued to be positive over 2016, and said its short-term land bank stood flat on the prior year at year-end, at around 76,000 plots.
However, looking ahead, Taylor Wimpey said it remains "mindful of the wider macroeconomic uncertainty" created by the outcome of the EU referendum and it will continue to be "selective" in further land investment.
The housebuilder, which also operates in Spain, said the Spanish market continued to be positive, with rises in both completions and average selling prices. Taylor Wimpey said it completed 304 homes in 2016, up from 251 a year earlier, selling those homes at an average selling price of EUR358,000, up from EUR315,000 the prior year.
The total order book from its Spanish operations as at December 21 was 291 homes,up from 270 homes a year earlier, and Taylor Wimpey said it expects to report a "significantly improved" operating profit from the division in 2016. For 2015, the unit generated GBP10.0 million operating profit.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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