REG - Taylor Wimpey PLC - Trading statement

Taylor WimpeyAnnouncement

11/11/2021 07:00

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RNS Number : 0134S  Taylor Wimpey PLC  11 November 2021

 

 

11 November 2021

Taylor Wimpey plc

Trading statement

 

Overview

Pete Redfern, Chief Executive, commented:

"We are pleased with performance in the second half to date, and remain on
track to deliver full year 2021 results in line with previous guidance.

We have been building a strong forward order book for 2022 and continue to see
good demand for our homes, supported by a positive market backdrop. Despite
well-publicised industry supply chain pressures, we are managing our supply
chain effectively and are benefiting from our scale and strong partner
relationships. We continue to see house price inflation fully offsetting build
cost inflation.

Looking ahead, market conditions remain supportive, and with the benefit of
our strong land position we are well placed to deliver against our medium term
targets."

 

UK market backdrop and trading performance

The UK housing market has remained positive in the second half of 2021 with
good customer demand and mortgage availability. We expect to deliver full year
results in line with our expectations, as outlined at the half year
results(1).

We have achieved a strong sales rate of 0.91 homes per outlet per week in the
second half of the year to date (2020: 0.76; 2019: 0.93), and 0.95 homes per
outlet per week for the year to date (2020: 0.73; 2019: 0.97). Cancellation
rates for the year to date have remained at normal levels, at 14% (2020: 21%;
2019: 15%).

Our outlet openings have progressed in line with our expectations, with 64 new
outlets opened in the year to date (2020: 56; 2019: 76). Our sales rate has
remained strong, and we are currently closing sales outlets ahead of schedule,
with completions on these sites continuing into 2022. We have operated on an
average of 224 sales outlets in the year to date (2020: 239; 2019: 252). We
expect to grow our outlets in the second half of 2022, and to grow our outlets
by around an additional 50 by mid-2023, leaving us well positioned for
significant growth in completions from 2023. As at 8 November 2021, our
current total order book, excluding joint ventures, stood at c.£2.8 billion
(2020: c.£3.0 billion; 2019: c.£2.7 billion). Our order book represented
10,643 homes as at 8 November 2021 (2020: 11,530; 2019: 10,486).

We continue to see house price inflation fully offsetting build cost
inflation. As widely reported, the industry has experienced pressures on the
cost and availability of certain materials and a general shortage of drivers
for haulage. There has been easing in certain areas, and going forward, we
expect conditions to gradually improve as suppliers adjust to current demand
levels. We continue to effectively manage these pressures, aided by our scale
and strong partner relationships and agreements.

Land

During the second half of the year to the end of October, we added 5,431 plots
(2020: 3,663) to the short term landbank. As at the end of October 2021, our
short term landbank stood at c.84k plots (4 July 2021: c.82k) and our
strategic land pipeline at c.148k potential plots (4 July 2021: c.147k). Our
landbank will continue to grow as we process incremental land deals agreed
following our equity raise in June 2020.

The land market remains competitive, and with the benefit of our strong land
position we continue to operate on a selective and replacement basis. We
remain focused on efficiently progressing recently acquired land through the
planning system, positioning our business to deliver annual completions in
line with our previous guidance of between 17,000 and 18,000 in the medium
term.

Group financial position

We have a strong balance sheet and cash flow. We expect our year end net
cash** position to remain strong, with the closing balance subject to the
timing of conditional land purchases.

Outlook

Market conditions remain supportive for new build homes, with continued low
interest rates, good mortgage availability, and ongoing Government support for
the housing market, particularly for first time buyers.

We remain on track to deliver full year 2021 results in line with our previous
guidance. We will continue to prioritise operating margin*(†), our primary
performance measure, and remain on track to deliver an operating margin target
of c.21-22% in the medium term.

We continue to expect modest growth in completions in 2022, followed by more
significant outlet driven growth in 2023.

 

* Operating profit is defined as profit on ordinary activities before net
finance costs, exceptional items and tax, after share of results of joint
ventures.

*† Operating margin is defined as operating profit divided by revenue.

** Net cash is defined as total cash less total borrowings.

 

Note:

(1) Guidance is for 2021 full year Group operating profit* including joint
ventures of c.£820 million, with UK completions (excluding joint ventures)
expected to be towards the upper end of our guidance range of 13,200 to
14,000.

 

2020 relates to 2020 equivalent trading period and 2019 relates to 2019
equivalent trading period, unless stated.

-Ends-

 

For further information please contact:

 

Taylor Wimpey plc
 
Tel: +44 (0) 7826 874 461

Chris Carney, Group Finance Director

Debbie Archibald, Investor Relations

Andrew McGeary, Investor Relations

 

Finsbury
 
TaylorWimpey@Finsbury.com

Faeth Birch

Anjali Unnikrishnan

 

 

Notes to editors:

Taylor Wimpey plc is a customer-focused homebuilder, operating at a local
level from 23 regional businesses across the UK. We also have operations in
Spain.

For further information please visit the Group's website:
www.taylorwimpey.co.uk
(https://eur02.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.taylorwimpey.co.uk&data=01%7C01%7CDebbie.Archibald%40taylorwimpey.com%7C87b6f1e886f8429207e908d6fe054c88%7C111bfc7fa92548b698024c6754c35b6f%7C0&sdata=52sv50a5midI5q%2BQVWIjTGQAhz4e%2FUHJqcxtc%2Fi3Y0o%3D&reserved=0)

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