Shares in Taylor Wimpey rose almost 10 per cent after the housebuilder pushed underlying operating profits up from £2.8m to £79.3m and improved margins significantly, beating all forecasts to reach 7.5 per cent at the operating level in the UK and 7.6 per cent in the US.
Completions in the UK edged up from 4,702 to 4,804 units, while average selling prices rose 9.8 per cent to £168,000. The housebuilder enters the second half with a strong UK order book with over 86 per cent of this year's targeted output sold. Taylor Wimpey has also been successful in cutting costs, with the total build cost per square foot for private homes falling from £114 to £104. And while the group remains focused on utilising the existing land bank, it also approved the purchase of 3,841 new plots. The current land bank equates to a healthy six years output at current build rates.
Sales in North America were less encouraging, with completions easing back from 1,933 to 1,843 units, although average selling prices were higher at £200,000, thanks to a switch in Canada away from high-rise developments. With margins improving, this fed through to a 51 per cent rise in operating profits to £28.2m.
KBC Peel Hunt is forecasting full-year adjusted EPS of 0.1p (2009: loss of 4.3p).
| TAYLOR WIMPEY (TW.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 29.5p | MARKET VALUE: | £943m | |
| TOUCH: | 29.5-30p | 12-MONTH HIGH: | 55p | LOW: 24p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 47p | NET DEBT: | 42% | |
| Half-year to 4 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 1.13 | -672.7 | -43.6 | nil |
| 2010 | 1.22 | 19.6 | 0.2 | nil |
| % change | +8 | - | - | - |
