Strong house sales put Taylor Wimpey in line for record profits
TAYLOR Wimpey shrugged off fears of a slowing housing market yesterday, reporting strong sales amid high demand supported by “healthy employment trends”, a competitive mortgage market and the Government’s Help to Buy scheme.
Last week its fellow housebuilder Redrow reported a “slight slowdown in sales” due to “ongoing political and economic uncertainty”, and estate agent group Countrywide warned the housing market “remained challenging”.
But Taylor Wimpey reported sales per outlet in the year to date of 0.81 per week, up from 0.75 in the same period last year, selling around 700 more homes compared to this time last year. Pete Redfern, the chief executive, said that the company would “probably have record profits” this year.
He added: “While we are alert to potential political and economic risks, demand for new housing remains high across the UK and market conditions are favourable.”
Taylor Wimpey’s order book currently stands at £2.2bn, slightly down from £2.3bn at the same time last year.
The housebuilder said it expects to deliver full-year results in line with expectations and to record more growth next year. “With a strong balance sheet in place and a high-quality land bank, our business is very well positioned to deliver sustainable growth,” Mr Redfern said.
He added that he was hoping that in the Budget, the Government would offer more guidance on longterm policy.
He said: “I will be looking for investment in affordable housing, and clearer signalling for the private rented sector,” adding that he hoped for clarity on “future tax treatment and legislative environment”.
Mr Redfern, who last year led a report into the decline of home ownership, said: “In a way I’m looking for help to the market, which is less directly relevant to us.”
In April, Taylor Wimpey set aside £130m to cover the cost of historic leases taken out with a doubling ground rent. The company said that it has reached agreements with freeholders to allow “the substantial majority” of those affected to change their lease to one linked to inflation.
Bovis Homes will update investors today, with Barratt Developments following tomorrow.
Shares in Taylor Wimpey closed down 0.1p at 192.8p.