Taylor Wimpey delivered a solid first-half performance that saw operating profits rise 50 per cent in the period to £100.9m. However, the shares are no more cheaply rated than those of most other housebuilders and with the company pension deficit ballooning to 21 per cent of its market value, the shares look up with events.
First-half completions rose 8 per cent to 5,083 and the average selling price grew 4.8 per cent to £176,000 - both of which helped boost the operating margin from 8.4 per cent to 11.4 per cent. Moreover, average private net reservations rose from 0.56 to 0.6 per week, while cancellation rates were stable at 15.1 per cent.
Taylor Wimpey has also taken advantage of lower land values to build up its land bank, purchasing 6,890 plots on 53 sites in the first half, taking the total to 64,898 plots - enough for 6.2 years of work at current completion levels. Trading in Spain remained difficult, though, and completions there fell from 30 to just 13, while the average price slid from £266,000 to £172,000.
Broker Peel Hunt expects full-year adjusted pre-tax profit of £160.8m and EPS of 3.8p (£89.8m and 2.1p for 2011).
| TAYLOR WIMPEY (TW.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 45p | MARKET VALUE: | £1.45bn | |
| TOUCH: | 45-45.1p | 12-MONTH HIGH: | 53p | LOW: 28p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 58p | NET DEBT: | 7% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 818 | 28.9 | 0.40 | nil |
| 2012 | 906 | 101 | 4.10 | 0.19 |
| % change | +11 | +249 | +925 | - |
Ex-div: 22 Aug Payment: 25 Sep | ||||
