Housebuilder Taylor Wimpey upbeat on future orders after pandemic slump

TAYLOR Wimpey has been upbeat on future orders and housing demand after recording a hefty fall in profits in the wake of coronavirus.

The housebuilder, which has sites across Scotland, may be back on track in part thanks to Government support, experts said, as the company insisted business had been resilient.

The company told investors they could expect an interim dividend in November, on top of the payout they will get next month.

The company has also been snapping up land, which has at times proven cheaper over the past year.

A year ago Taylor Wimpey had 78,000 plots in its shortterm landbank. It now owns around 82,000.

It said: “Despite the continuation of national restrictions in the first few months of the year, customer demand for new housing has remained resilient.”

David Kimberley, Freetrade analyst said: “2020 marked just the second time in the past decade that Taylor Wimpey had seen a decline in profits.

“But there are positive signs the firm is on the path back to winning ways. A £2.8 billion order book, growing demand and increasing house prices all look to be working in the group’s favour.”

Laura Hoy, Hargreaves Lansdown equity analyst, said: “So far it seems Taylor Wimpey has made all the right moves since the onset of the pandemic and the government’s commitment to keeping a floor under the housing market has kept the foundations strong.

“While many of its peers chose to tighten their purse strings, the group made the bold choice to spend on new land during the pandemic.

“If things carry on as they are, the cheap land purchases will bring the group one step closer to its goal to deliver margins over 21 per cent.”

However, potential concerns remain on the horizon. Some of the “resilient” customer demand in the first few months of 2021 has been propped up by

Government support. Last year, Chancellor Rishi Sunak removed stamp duty south of the Border on some property sales to help the sector through the pandemic.

“Sunak and Co have done all they can to keep prices and purchases up during the past 12 months,” Mr Kimberley said.

“Taylor Wimpey may be looking anxiously

towards the end of furlough and the stamp duty holiday. When those and other bits of support come to a close, it may make things tougher for the housing sector all round.”

Chief executive Pete Redfern said: “The UK housing market continues to be resilient and we are trading in line with our full year expectations.

“With strong market fundamentals, customer demand for our highquality homes remains robust and we are achieving a strong sales rate and building a healthy forward order book.”

The firm posted a 36% fall in revenues in 2020 to £2.79bn because of coronavirus, while pre-tax profits fell 68% to £264 million, last month.

There was a 38.9% decrease in group completions, to 9,799 against 16,042 the year before, including joint ventures, primarily due to the first lockdown. In Scotland, the number of completions last year was 945, against 1,390 in 2019. The company said earlier that it was confident the housing market will strengthen. It will continue to actively buy land for future developments as orders for new homes increased, it added.

It pointed to one new development at South Scotstoun, South Queensferry, with 341 homes under way and more in the pipeline.

Shares in Taylor Wimpey closed down slightly, 0.78% , at 184.8p.