LONDON (Alliance News) - Taylor Wimpey PLC Tuesday joined sector peers in reporting strong growth in 2014 profits driven by higher home completions at higher average selling prices, and it was also positive about its outlook saying the so-called "spring selling season" has got off to a better start than it had expected.
The home builder reported a pretax profit of GBP468.8 million for 2014, up from GBP306.2 million in 2013, as revenue rose to GBP2.69 billion, from GBP2.30 billion. It completed 12,454 homes, a 6.5% increase on 2013, while its average selling price rose 11.5% to GBP213,000, from GBP191,000.
Like peers, it reported higher margins and returns. Its operating margin rose to 17.9%, from 13.6% in 2013, while return on net operating assets rose to 22.5%, from 16.8%.
It raised its total maintenance dividend for 2014 to 1.56 pence, from 0.69p in 2013, including a final dividend of 1.32p, up from 0.47p. That means its total pay-out doubled to 2% of net assets, "reflecting both confidence in our performance and the resilience of the UK housing market".
Taylor Wimpey also joined peers in expressing confidence in its prospects. It said its year-end order book stood at 6,601 homes worth GBP1.40 billion, compared with 6,627 homes worth GBP1.25 billion at the end of 2013.
"We are currently operating in a housing market underpinned by a significant structural demand and supply imbalance. Housing remains high on the political agenda with recognition of the importance of housebuilding to the economy and the need for more quality homes in the UK by all of the main political parties. Whilst there remains uncertainty around the outcome of the General Election in May, consumer confidence remains solid and is supported by healthy underlying demand, low interest rates and high levels of employment," it said in its outlook statement.
It said both demand and trading at the start of the spring selling season - the months of key house buying demand in the UK - had been at the "better end of our expectations". Net private sales rates for the year to March 1 of 0.70 are down just slightly on the 0.72 rate at the same stage in 2014. It said that level is sustainable, and with slower market growth it expects build cost pressures to reduce in 2015.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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Taylor Wimpey (TW.)
