Taylor Wimpey profit rises amid 'robust' demand

(Sharecast News) - Housebuilder Taylor Wimpey posted a jump in full-year profit on Wednesday as completions edged higher amid "robust" demand for new homes.In the year to the end of December 2018, profit before tax was up 18.9% to £810.7m as completions ticked up 2.9% to 15,275. Revenue was 2.9% higher at £4.08bn and operating profit rose 4.3% to £880.2m, driven by improved performances in the UK and Spanish businesses.Profit before tax and exceptional items increased 5.5% to £856.8m and the company achieved record net cash of £644.1m at 31 December 2018 versus £511.8m the year before. This is despite returning £499.5m to shareholders by way of dividends in the year and paying £25.5m in relation to the Ground Rent Review Assistance Scheme set up to assist some of its customers to move their ground rent escalating terms to less expensive terms.Taylor Wimpey attributed the improvement in net cash largely to a strong performance in underlying trading and balance sheet discipline.In the UK, the order book stood at 8,304 units as at 31 December 2018 versus 7,136 at the same time a year ago, while the UK forward order book value was £1.78bn compared to £1.63bn in 2017.Taylor Wimpey said the UK housing market remained stable last year despite wider macroeconomic and political uncertainty. Customer demand for new build homes continued to be robust, underpinned by low interest rates, a wide choice of mortgage deals and the Help to Buy scheme.During the year, the housebuilder said it saw good levels of demand throughout the country, which converted into strong sales rates across the business. Trading in Central London was stable, while the outer London market remained robust, despite some signs of increasing customer caution in London and the south east towards the end of the year.The group said it continues to expect stable volumes in 2019 and for underlying build cost increases during the year to be at a similar level to 2018, at around 3-4%.Chief executive Pete Redfern said: "2018 was another strong year for Taylor Wimpey with good progress against our strategic priorities. We delivered in line with our expectations, achieving a strong sales rate and record revenues. Despite ongoing macroeconomic and political uncertainty, we have made a very positive start to 2019 and are encouraged to see continued strong demand for our homes. We enter the year with a strong order book and a clear strategy in place to deliver long term value for shareholders."We are very pleased with how our business is adapting to our customer-centred strategy. We are enhancing every step of our customers' buying and aftercare service so that we become the first choice homebuilder in all market conditions."At 1500 GMT, the shares were up 3.6% to 177.01p. Canaccord Genuity said the group delivered a good set of results that were broadly in line and a smidgen higher than consensus at the pre-tax profit level."Overall, management does not appear to be changing its view that 2019 will be a year of stable volumes followed by the potential for an acceleration of growth in 2020. An expectation of flattish underlying PBT for 2019 looks very sensible to us at this stage. Assuming macro conditions hold up, the dividend looks well supported and offers an attractive current yield of circa 11% for 2019. A solid set of results overall."