REG - Taylor Wimpey PLC - Trading Statement

Taylor WimpeyAnnouncement

11/01/2024 07:00

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RNS Number : 3171Z  Taylor Wimpey PLC  11 January 2024

 

 

11 January 2024

Taylor Wimpey plc

Trading statement for the year ended 31 December 2023

Taylor Wimpey is issuing the following update on trading ahead of its full
year results for the year ended 31 December 2023, which will be announced on
28 February 2024.

 

 

Group operating profit expected to be at the top end of our guidance range

 

Jennie Daly, CEO, commented:

"We are pleased to have delivered a full year performance in line with
expectations and expect to report full year operating profit* at the top end
of our guidance range. Despite the difficult market conditions throughout the
year, we maintained a sharp operational focus and delivered a good
performance.

Looking ahead, it is encouraging to see a reduction in mortgage rates,
however, in the short term the market remains uncertain and the planning
backdrop extremely challenging.

Taylor Wimpey is a strong and agile business underpinned by a robust balance
sheet and an excellent, well-located landbank. These attributes enable us to
manage the business in all market conditions, delivering quality homes to our
customers and long term value to our stakeholders. We remain confident in the
attractive medium and long term fundamentals of the sector."

 

2023 performance

Total Group completions (including joint ventures) were 10,848 (2022: 14,154).
UK home completions (including joint ventures) were 10,438(†) (2022:
13,773), which included 2,388 affordable homes (2022: 2,920) equating to 23%
of total completions (2022: 21%). Our net private reservation rate for 2023
was 0.62 homes per outlet per week (2022: 0.68). Excluding the impact of bulk
deals, the net private sales rate was 0.54 (2022: 0.65). The cancellation rate
for the full year was 18% (2022: 18%).

UK average selling prices on private completions increased by 5.1% to £370k
(2022: £352k) with the overall average selling price increasing by 3.5% to
£324k (2022: £313k). We ended the year with a lower order book valued at
£1,772 million (31 December 2022: £1,941 million), excluding joint ventures,
which represents 6,999 homes (31 December 2022: 7,499 homes), of which 2,565
are private (2022: 2,943) and 4,434 are affordable (2022: 4,556).

In the UK, we traded from an average of 238 outlets in 2023 (2022: 232) and
ended the year with a total of 237 outlets (31 December 2022: 259).

We continue to expect full year Group operating profit to be at the top end of
our guidance range of £440 million to £470 million.

As expected, prevailing build cost inflation continued to moderate throughout
H2 2023 and is now running at 0-1% on new tenders. We expect underlying build
cost inflation of c.4% on H1 2024 completions as inflation contained in the
opening work in progress balance is realised.

Land and planning

As at 31 December 2023, our short term landbank stood at c.80k plots (2022:
c.83k). Our strategic land pipeline was c.142k potential plots (2022: c.144k
potential plots).

Our strong land position enabled us to continue to be highly selective in our
land buying during the year and as a result, 2023 approvals were significantly
lower, at c.3k plots (2022: c.7k).

The planning system remains slow and continues to impact outlet openings as
material delays in planning and technical determinations persist. However, we
have a high-quality, well-located landbank and our experienced teams continue
to work hard to progress this land through planning.

Spain current trading

Our Spanish business performed well, completing 410 homes in the year (2022:
381) at an average selling price of €400k (2022: €383k). The total order
book as at 31 December 2023 stood at 490 homes (31 December 2022: 448 homes).

Group cash position

We ended the year with a strong net cash(‡) position of £678 million (31
December 2022: £864 million net cash).

Outlook

As previously guided, we enter the year with a reduced order book. Whilst too
early in the year to gauge customer behaviour, we have seen good levels of
enquiries so far this year and it is encouraging to see recent mortgage rate
reductions which will improve affordability.

We will continue to focus on driving value and sales performance, maintaining
tight control on costs and investment in work in progress.

The planning environment remains challenging and will continue to impact
outlet openings. However, as we look ahead, with a strong balance sheet and a
highly experienced management team, we remain well positioned to optimise our
strong landbank and strategic pipeline and remain confident in the attractive
medium and long term fundamentals of the sector.

 

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

(‡) Net cash is defined as total cash less total borrowings.

 

Note:

(†) Joint ventures completions were 82 in 2023 (2022: 222).

 

-Ends-

 

CEO Jennie Daly and Group Finance Director Chris Carney will be hosting a
conference call with Q&A for analysts and investors at 8.30am on 11
January 2024. The call will be recorded and streamed live to our website:
www.taylorwimpey.co.uk/corporate/investors/results-and-reports
(http://www.taylorwimpey.co.uk/corporate/investors/results-and-reports)

For further information please contact:

Taylor Wimpey plc
 
Tel: +44 (0) 1494 885656

Jennie Daly, CEO

Chris Carney, Group Finance Director

Debbie Archibald, Investor Relations

Andrew McGeary, Investor Relations

 

FGS Global
 
TaylorWimpey@fgsglobal.com

Faeth Birch

Anjali Unnikrishnan

James Gray

 

Notes to editors:

Taylor Wimpey plc is a customer-focused homebuilder, operating at a local
level from 22 regional businesses across the UK. We also have operations in
Spain.

For further information, please visit the Group's website:
www.taylorwimpey.co.uk

Follow us on X via @TaylorWimpeyplc

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