Taylor Wimpey: Encouraging trading statement. More to go for?

Monday, Jan 14 2013 by
2

Taylor Wimpey's (74.5p and 4.5% of the JIC portfolio) trading statement for the year ended 31st December 2012 is excellent. The Company says that it expects full year results to be at the top end of expectations with Group operating profits up over 40%. Margins for the whole year were strong; ahead of the 11.1% achieved in the first half.

Market conditions are described as being stable and the Company says its starts 2013 in an excellent position with its 31st December 2012 order book some 14% higher than a year ago at £948m. The Company continues to prioritise margin performance over volumes.

In its outlook statement the Company says that consumer sentiment towards the housing market is more positive than anything they have seen in recent times and that its "well positioned sales outlets, high quality land portfolio, increased order book and strong balance sheet give us confidence to target further improvements and create increased value for our shareholders in 2013 and beyond".

The stock is up 55% since it was added to the JIC portfolio last May. As a business it has performed well during a difficult time for the housing market and is well placed should there be a sustainable improvement in market conditions. Earnings per share are expected to grow by 25% in 2013 and 35% in 2014. At 74.5p the shares are valued at 12.5x 2014 earnings and I think can make further progress especially as I suspect there may be some upward revisions to forecasts on the way. Happy holder.

www.JohnsInvestmentChronicle.com

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Taylor Wimpey plc is a residential developer. The Company operates at a local level from 24 regional businesses across the United Kingdom, and it has operations in Spain. Its segments include Housing United Kingdom and Housing Spain. The Housing United Kingdom segment includes North, Central and South West, and London and South East (including Central London) divisions. The North division covers its East and West Scotland, North East, North Yorkshire, Yorkshire, North West, Manchester, North Midlands, Midlands and West Midlands regional businesses. The Central and South West Division covers its East Midlands, South Midlands, East Anglia, Oxfordshire, South Wales, Bristol, Southern Counties and Exeter regional businesses. The London and South East Division includes Central London and covers its East London, North Thames, South East, South Thames and West London regional businesses. It builds homes in various locations of Costa Blanca, Costa del Sol and the island of Mallorca. more »

LSE Price
165.55p
Change
3.0%
Mkt Cap (£m)
5,430
P/E (fwd)
8.1
Yield (fwd)
11.1



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2 Comments on this Article show/hide all

johnrosier 1st Mar '13 1 of 2
1

 

Taylor Wimpey (82p and 3.7% of JIC portfolio); Results for 2012 published this morning confirmed the good news outlined in the 14th January trading statement. UK operating margins improved to 11.5% from 9.0% in 2011. Operating profits were up 44% at £230.1m and earnings per share came in at 4.7p (2011 2.1p) compared to consensus forecasts of 4.1p. Net debt was reduced to £59m compared to £116.9m in December 2011. Good news also on the dividend front with the final dividend up 13.2% to 0.43p.


Current trading is encouraging with an order book of £1,076m at 24th February compared to £982m in February 2012. The Company says that;

"sales rates and visitor trends have improved in recent weeks, particularly in the South and Midlands, and we have seen a noticeable increase in the number of NewBuy reservations in the first eight weeks of the year."

They go on to say that they have seen an improvement in mortgage availability in the last few months which combined with a tentative improvement in consumer confidence , gives ground for cautious optimism in the short term.


Conclusion: The shares stand at a significant premium to nav per share of 61.5p but I think that in the short term the market will focus on improving profitability.. On consensus forecasts for 2013 the shares are valued at c14.5x earnings for 19% growth and 11.4x 2014 earnings for 28% growth. Shares are up 70% since bought last May. Happy Holder!

Website: JohnsInvestmentChronicle
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johnrosier 21st Mar '13 2 of 2
1

Reduced holding to 2% taking advantage of post budget move up to realsie some profits. Shares up 38% so far this quarter. Hope to add on a fallback.

www.JohnsInvestmentChronicle.com

Website: JohnsInvestmentChronicle
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About johnrosier

Johnrosier

I manage my subscription website  www.JohnsInvestmentChronicle.com in which I show my portfolio and all transactions. I blog within an hour of trading, with an explanation, and send an alert email to all my subscribers. I do not pretend to have all the answers but I hope my portfolio, and the trades, provides food for thought as well as helping those who are new to managing their own portfolios.I think what I do is unique. There are plenty of tipsters out there who will remind you of the good ones and quietly forget the duffers; I do not have that luxury as the portfolio is there for all to see. I have to confront my mistakes and deal with them. A tipster also does not show how a tip fits into the context of an overall portfolio. My portfolio of up to 30 holdings has different holding sizes based on my conviction behind the stock and its risk. I set up www.JohnsInvestmentChronicle.com in January 2012. Prior to that :In September 1984, I left university with a degree in Zoology and started work in the City of London. Over the next twenty five years most of my time was spent managing UK equity portfolios with Fleming Investment Management and Henderson Global Investors, for company and local authority pension schemes as well as the reserve fund for a well known charity. During 2009 I left full time employment and decided to take time out to consider the next stage of my career. In the meantime I have been putting my years of experience to good use investing the family savings. I have thoroughly enjoyed the freedom of investing from home and despite some tricky periods during 2011 it has been a rewarding experience.  more »

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