Housebuilder Taylor Wimpey says that it has already sold 60 per cent of its 2010 UK order book, thanks to more buoyant conditions in the housing market - double the forward sales it achieved this time last year.
However, these full-year results were marred by heavy losses and a 20 per cent fall in completions. Strong cash generation and May's rights issue have cut net debt by 51 per cent to £751m, but the balance sheet isn't strong enough to support major land purchases. Indeed, management are focusing on cutting costs. Over 60 per cent of current sites have been "re-planned", contributing to a £25m saving on build costs, and group overheads were slashed by 21 per cent. Chief executive Peter Redfern believes it will take "two to three years" before a return to double-digit margins.
Achieving better-than-expected prices on UK sales resulted in a £15.6m second half net credit. But the US remains subdued, and Mr Redfern expects some "wobbly statistics" going forward, adding that the US is lagging the UK recovery by three to six months. A weaker pound means this could be a good time to sell the north American business, although Mr Redfern says the company isn't in talks.
Broker KBC Peel Hunt forecasts a pre-tax loss of £34.1m in 2010 and a loss per share of 1p.
| TAYLOR WIMPEY (TW.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 37p | MARKET VALUE: | £1,183m | |
| TOUCH: | 36-37p | 12-MONTH HIGH: | 55p | LOW: 13p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 47p | NET DEBT: | 50% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p)* | Dividend per share (p)* |
|---|---|---|---|---|
| 2005 | 3.48 | 0.41 | 38.4 | 10.2 |
| 2006 | 3.57 | 0.41 | 38.3 | 11.2 |
| 2007 | 4.71 | -0.04 | -18.4 | 12.0 |
| 2008 | 3.47 | -1.97 | -133 | nil |
| 2009 | 2.60 | -0.70 | -25.1 | nil |
| % change | -25 | - | - | - |
Ex-div: - Payment: - *Adjusted for rights issue | ||||
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