Last checked at 12 Nov 2012 07:00
12 November 2012
Taylor Wimpey plc
Interim Management Statement
The following statement constitutes Taylor Wimpey's Interim Management Statement, covering the period from 2 July 2012 to the date of this announcement.
Having already achieved significant improvements across all of our key financial metrics over the last three years, we have continued to make further progress during the second half of this year. These improvements have been delivered through the implementation of our strategy, which we continue to drive through a combination of: increasing the proportion of strategic land sites; improving returns from land purchases; an ongoing tight focus on costs and value optimisation; and the benefits of the increasing use of our new housetype range.
Current trading
Housing market conditions in the UK have remained stable and, although mortgage availability remains restricted, we have seen incremental improvement since the half year results. We welcome the Government's recent announcements recognising the housebuilding industry's importance to the UK economy and hope to see further improvements in mortgage lending over the coming months as the 'Funding for Lending' scheme gains more traction.
Sales rates in the second half of 2012 are similar to the equivalent period of 2011, with an average net private reservation rate of 0.57 sales per outlet per week in 2012 to date (2011 equivalent period: 0.56). Cancellation rates remain below the long term average at 15.3% for the year to date (2011 equivalent period 15.7%).
The Government's NewBuy scheme continues to generate strong interest amongst our customers since its launch in March 2012 and we have now taken 467 net reservations under the scheme and its recently launched equivalent in Scotland "MI New Home". Of these, we have legally completed 137 homes and exchanged contracts on a further 132. Although we remain selective in our use of shared equity schemes, we continue to support the Government-backed FirstBuy scheme and have now completed a total of 1,179 homes under the scheme. 365 of these homes have been completed during the second half of the year to date and we look forward to providing more much-needed new housing for first time buyers following the Government's recent announcement of additional FirstBuy funding.
Maximising the value achieved from each home completion remains our top priority and we are now fully sold for our targeted 2012 completions and are building our order book for 2013 completions. The current order book for future completions is £1.11 billion (6 November 2011: £1.02 billion), with the growth being driven by the private order book. The margin achieved on these sales also shows further improvement on the equivalent position last year and on that achieved on completions in the first half of 2012.
We have received further external recognition since the half year, being admitted to both the FTSE4Good Index and the Dow Jones Sustainability Europe Index at their most recent reviews. We were also named 'Large Housebuilder of the Year' at the recent Housebuilder Awards
Land portfolio and planning
We have maintained our consistent, disciplined approach to new land acquisition and continue to consider it appropriate to hold a longer land portfolio at this stage of the market cycle. We continue to deliver enhanced returns on newly acquired sites as we open them for home sales and have achieved a natural increase in the number of active outlets to 321 (6 November 2011: 307) without compromising our focus on optimising planning consents and value-engineering sites.
We have approved the purchase of 3,436 new plots on 33 new sites since the half year. This includes our successful bid for Chobham Manor, the first residential phase of the redevelopment of the Queen Elizabeth Olympic Park in London.
We also continue to improve the quality of our extensive strategic land portfolio, both by the progression of existing sites through the planning process and by the targeted addition of new potential plots.
Group financial position
Our balance sheet remains strong and we expect net debt at the end of 2012 to be in line with the prior year (31 December 2011: £116.9 million).
We have bought back a further £9.1 million of 10.375% Senior Notes due 2015 in the second half of 2012 to date, reducing the amount outstanding to £149.9 million.
We are also pleased to announce that we signed an agreement with Prudential/M&G UK Companies Financing Fund LP on 9 November to extend our existing £100 million term loan, which was originally due to mature in June 2015. This agreement gives us the option to extend the loan for a further 5.5 years to mature in November 2020 subject to redemption prior to 30 June 2015 of the outstanding 10.375% senior notes due 31 December 2015.
Outlook
We continue to prioritise value creation and margin improvement as we remain focused on the creation of medium to long term value for our shareholders. While we continue to take a cautious approach, given the uncertainty in the wider economy, conditions within the UK housing market remain stable. We are seeing the benefits of the consistent disciplined approach to land acquisition that we have adopted over the last three years and continue to add attractive short term and particularly strategic sites to our land portfolio.
We are confident of delivering full year performance in line with our expectations and with our value-focused strategy, further increased order book, high quality land portfolio and strong balance sheet, we remain well positioned for the future.
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For further information please contact:
Taylor Wimpey plc Tel: +44 (0) 1494 885656
Pete Redfern, Group Chief Executive
Ryan Mangold, Group Finance Director
Jonathan Drake, Investor Relations
RLM Finsbury Tel: +44 (0) 20 7251 3801
Andrew Dowler/Sarah Heald
Notes to editors:
Taylor Wimpey plc is a residential developer with operations in the UK and Spain. We aim to be the leading developer for creating value and delivering quality.
For further information, please visit the Group's website:
http://plc.taylorwimpey.co.uk