Headline numbers for Taylor Wimpey (TW.) for the year to December 2017 were dented by a £105m provision to cover the cost of renegotiating terms on houses sold on a leasehold basis. Around 90 per cent of these issues have already been resolved, and no further provision is anticipated. Without this, adjusted operating profits were ahead by 10.1 per cent at £841.2m. And with over half a billion pounds in cash, the housebuilder confirmed that there will be a special dividend payment of 10.4p a share, which with the ordinary payout equates to a yield just shy of 8 per cent.
All the metrics underlined the continued strength of the housing market, with a record return on net operating assets of 32.4 per cent. Completions rose by 4.6 per cent to 14,842, and a 3.5 per cent rise in average selling prices was more than enough to cover build cost inflation, currently running at 3-4 per cent. And demand remains strong, with nearly half of private completions for 2018 already sold. Taylor Wimpey maintained its disciplined approach to land, holding 75,000 plots in its short-term land bank, half of which was drawn from the strategic allocation.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to December 2018 of £880m and EPS of 21.8p (from £812m and 20.2p in 2017).
| TAYLOR WIMPEY (TW.) | ||||
| ORD PRICE: | 190.15p | MARKET VALUE: | £6.23bn | |
| TOUCH: | 190.15-190.25p | 12-MONTH HIGH: | 212p | LOW: 168p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 96p | NET CASH: | £512m | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
| 2013 | 2.30 | 306 | 7.5 | 0.69 |
| 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 | 3.97 | 682 | 17.0 | 4.74 |
| % change | +8 | -7 | -6 | +68 |
| Ex-div: | 05 Apr | |||
| Payment: | 18 May | |||
| *Excludes special dividends of 1.54p for 2013, 7.68p for 2014, 9.2p for 2015 and 2016, and 10.4p for 2017 | ||||
