As a leading economic recovery sector, housebuilding is booming as the latest results from Taylor Wimpey (TW.) testify. In the six months to end-June, the company increased underlying operating profits by a third to £132m, helped by the government's mortgage guarantee schemes including 'Help to Buy'. Not only that, but as a third of UK completions were on previously impaired plots, the latest results have been boosted by a £34m reversal of inventory writedowns to reflect the improved market conditions.
A modest increase in house sales to almost 5,200 units, coupled with a 7 per cent rise in average selling price at £188,000, helped boost operating margins by over two percentage points to 13.5 per cent. At end-June 2013 the order book stood at a record £1.3bn, up a third by value and 24 per cent by volume over those trading periods. Looking ahead, the land bank with planning permission or near planning permission stands at 65,000 plots, or more than six years' supply at current build rates. In addition, the company owns or controls 102,000 plots without planning permission, having added 35,000 plots in the past three-and-a-half years. Reflecting the strong cash flow generation, net debt has halved to £68m in the past year.
Broker Jefferies expects full-year pre-tax profits before exceptionals to rise from £185m to £250m to produce EPS of 6.1p, up from 4.7p in 2012.
TAYLOR WIMPEY (TW.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 108p | MARKET VALUE: | £3.5bn | |
| TOUCH: | 108.1-108.3p | 12-MONTH HIGH: | 108p | LOW: 43p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 67p | NET DEBT: | 3% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 906 | 99 | 4.10 | 0.19 |
| 2013 | 1,007 | 143 | 4.30 | 0.22 |
| % change | +11 | +44 | +5 | +16 |
Ex-div:21 Aug Payment:25 Sep | ||||
