Taylor Wimpey (TW.) largely dispelled fears over Brexit in its 2018 full-year results. Chief executive Peter Redfern said the ongoing political and economic uncertainty had not been enough to dampen demand for new-build homes. Indeed, a wide range of available mortgage products and low interest rates helped to push up sales in the North, Central and South West UK, while London and the South East remained broadly flat. Efficiencies matter whatever the state of the markets, so management is looking to reduce the land bank years to the 4-4.5-year range, from 5.1 currently.
In spite of the uncertainty, the shares have flatlined over the past year, with support provided by the level of shareholder returns. Net cash reached a record £644m in the year, well in advance of the overall payout to shareholders through the year. Management is planning £600m in total dividends in FY2019. The plan, subject to shareholder approval, will see a total dividend per share of 18.3p, representing a double-digit yield at the current price.
Prior to these numbers, Citi was forecasting underlying pre-tax profits of £846m in 2019, giving EPS of 20.9p, compared with £857m and 21.2p in 2018.
| TAYLOR WIMPEY (TW.) | ||||
| ORD PRICE: | 175p | MARKET VALUE: | £ 5.74bn | |
| TOUCH: | 175.35-175.45p | 12-MONTH HIGH: | 196p | LOW: 128p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 98p | NET CASH: | £644m | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 2.69 | 469 | 11.6 | 1.56 |
| 2015 | 3.14 | 603 | 15.1 | 1.67 |
| 2016 | 3.68 | 733 | 18.1 | 2.82 |
| 2017 (restated) | 3.97 | 682 | 17.0 | 4.74 |
| 2018 | 4.08 | 811 | 20.1 | 6.24 † |
| % change | +3 | +19 | +18 | +32 |
| Ex-div: | 04 Apr | |||
| Payment: | 17 May | |||
| † Shareholders will receive a total dividend of 16.9p a share, comprising an ordinary dividend of 6.24p a share and special dividends of 10.7p. | ||||
