Demand for Taylor Wimpey (TW.) homes was robust during the first half of 2019, but build cost inflation and flat sales prices pared back the operating margin to 18 per cent, from 20 per cent the prior year. The average build cost per unit was £152,500, up from £143,700 on the comparable period, due to higher material costs, a "continued focus on quality" and a greater proportion of completions in London and the south-east.
Net sales averaged one home a week across 257 sites, compared with 0.83 a week across 280 outlets in the first half of 2018. But higher sales volumes failed to offset thinner margins, and operating profits dropped 9 per cent. The annual return on net operating assets also declined from 30.9 to 29.4 per cent, well short of the 2023 target of 35 per cent. Management is hoping to boost efficiency by reducing the length of the short-term landbank by one year by 2023. It stood at 77,060 plots at the end of June, equivalent to 5.1 years of supply at current levels, down from 5.3 years last year.
Bloomberg consensus forecasts are for adjusted EPS of 20.4p this year, down from 21.2p in 2018.
| TAYLOR WIMPEY (TW.) | ||||
| ORD PRICE: | 169.4p | MARKET VALUE: | £5.56bn | |
| TOUCH: | 169.3-169.5p | 12-MONTH HIGH: | 181p | LOW: 120p |
| DIVIDEND YIELD*: | 4.5% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 92p | NET CASH: | £392m | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 1.72 | 301 | 7.5 | 2.44 |
| 2019 | 1.73 | 300 | 7.4 | 3.84 |
| % change | +1 | -0.4 | -1 | +57 |
| Ex-div: | 3 Oct | |||
| Payment: | 8 Nov | |||
| *Excludes special dividends of 10.7p in 2018 | ||||
