If the first-half results statement from Taylor Wimpey (TW.) is anything to go by, housebuilders are still in pretty good shape. Not only did the company deliver a solid performance, it also revealed that trading in the wake of the EU referendum has been largely unaffected, with visitor levels and bookings in line with normal seasonal patterns.
In fact, at 24 July, the forward order book stood at £2.2bn which is around 90 per cent of targeted sales for the full-year. Excluding joint ventures, first-half completions rose by 3 per cent to 6,019, while average selling prices were up 5.8 per cent at £238,000. Underlying build cost per unit rose from £118,900 to £129,400, mainly as a result of higher labour costs, although these pressures are expected to moderate to around 3-4 per cent annual inflation.
To reduce 'downside risk' following the vote, required margins and expected return on land were increased. In the 2016-18 period, management has set targets including an average annual return on net operating assets of 30 per cent, operating margins of 22 per cent and dividend payments of £1.3bn. For 2016, shareholders will receive total dividends of 10.91p a share, rising to 13.8p a share in 2017.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to December 2016 of £715m and EPS of 17.6p (2015: £604m/14.9p).
| TAYLOR WIMPEY (TW.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 151.1p | MARKET VALUE: | £4.93bn | |
| TOUCH: | 151.2-151.4p | 12-MONTH HIGH: | 202p | LOW: 110p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 79p | NET CASH: | £117m | |
| Half-year to 3 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p*) |
|---|---|---|---|---|
| 2015 | 1.34 | 237 | 5.8 | 0.49 |
| 2016 | 1.46 | 269 | 6.6 | 0.53 |
| % change | +9 | +13 | +14 | +8 |
Ex-div: 25 Aug Payment: 7 Oct *Excluding a special dividend of 9.2p a share, paid on 15 July | ||||
