TIDMTW.
RNS Number : 3965U
Taylor Wimpey PLC
29 July 2020
29 July 2020
Taylor Wimpey plc
Half year results for the period ended 28 June 2020
Pete Redfern, Chief Executive, commented:
"I am pleased with Taylor Wimpey's performance during a very
challenging time and am proud of the resilience, principled
approach and agility that our teams have shown.
Our performance for the first half of 2020 has been impacted by
the closing of our sites and sales centres but we have now reopened
all sites successfully and safely and have returned to a
sustainable level of sales and build. We are delighted that our NHS
and care workers discount scheme has been taken up by over 1,200
households to date.
Looking ahead, balance sheet strength, a long order book and our
high quality and growing landbank gives us confidence in our
ability to navigate the challenges and emerge stronger from the
pandemic. While uncertainties remain, we are confident in the
underlying fundamentals of the housing market.
I would like to thank all of our employees, subcontractors and
suppliers for their exceptional response to the crisis. Their
tremendous effort has enabled us to continue to support customers
and protect the value of our business, at a time of great
uncertainty."
Group financial highlights
H1 2020 H1 2019 Change FY 2019
Revenue GBPm 754.6 1,732.7 (56.4)% 4,341.3
-------- -------- ---------- --------
Operating (loss) / profit*
GBPm (16.1) 311.9 n/a 850.5
-------- -------- ---------- --------
Operating margin * (2.1)% 18.0% n/a 19.6%
-------- -------- ---------- --------
(Loss) / profit before
tax and exceptional items
GBPm (29.8) 299.8 n/a 821.6
-------- -------- ---------- --------
(Loss) / profit before
tax GBPm (39.8) 299.8 n/a 835.9
-------- -------- ---------- --------
(Loss) / profit for the
period before exceptional
items GBPm (23.2) 242.0 n/a 662.3
-------- -------- ---------- --------
(Loss) / profit for the
period GBPm (31.5) 242.0 n/a 673.9
-------- -------- ---------- --------
Basic (loss) / earnings
per share pence (1.0) 7.4 n/a 20.6
-------- -------- ---------- --------
Adjusted basic (loss)
/ earnings per share
pence (0.7) 7.4 n/a 20.3
-------- -------- ---------- --------
Tangible net asset value
per share pence 102.8 102.2 0.6% 100.5
-------- -------- ---------- --------
Net cash (++) GBPm 497.3 392.0 26.9% 545.7
-------- -------- ---------- --------
Return on net operating
assets** 16.8% 29.4% (12.6)ppt 31.4%
-------- -------- ---------- --------
UK operational highlights:
-- Group completions of 2,771 homes (H1 2019: 6,541) excluding
joint ventures, impacted by site closure during Q2 2020
-- Positive sales momentum and customer interest:
o H1 2020 net private sales rate of 0.70 (H1 2019: 1.00). Sales
rate of 0.97 prior to shutdown, which reduced to 0.30 during the
shutdown
o Sales prices during shutdown consistent with those achieved in
Q1 2020
o Outlets increased to 252 at period end (H1 2019 period end:
246 outlets)
o Strong total order book as at 28 June 2020 representing 11,686
homes (30 June 2019: 10,137 homes), up 15%, with a value of
GBP2,904 million (30 June 2019: GBP2,366 million), up 23%,
excluding joint ventures
-- NHS and care workers discount scheme well received with 1,206
homes reserved at w/e 26 July 2020
-- All of our employees have returned to work from furlough and
we have returned all furlough subsidies to Government
-- Improved average Construction Quality Review score to 4.31,
in the top quartile of large homebuilders (H1 2019: 4.05)
-- 4 out of 5 star rating on Trustpilot and over 90% of
customers would recommend us in H1 2020, according to the Home
Builders Federation 8-week customer survey
-- Successful equity raise, raising net proceeds of c.GBP510
million for investment in attractive land opportunities
Financial overview
The COVID-19 pandemic has had a significant impact on production
activity and therefore completion levels for the first half of
2020. Our sites and sales centres were closed from 23 March and we
returned to site at reduced capacity between 4 May and 29 May.
Sales centres reopened between 22 May and 29 June . This has
resulted in a material impact on our financial performance.
Total home completions (excluding joint ventures) decreased by
57.6% to 2,771 (H1 2019: 6,541). Gross profit was GBP91.0 million
(H1 2019: GBP409.6 million), with a gross profit margin of 12.1%
(H1 2019: 23.6%). Group operating profit decreased to a loss of
GBP16.1 million (H1 2019: GBP311.9 million profit) and an operating
margin of (2.1)% (H1 2019: 18.0%) driven by reduced ability to
absorb fixed costs on lower completions.
The operating loss includes GBP39.2 million of costs directly
relating to the COVID-19 pandemic. These include GBP29.9 million of
non-productive site overhead costs incurred during the controlled
closure and lockdown period which would ordinarily be capitalised
to work in progress and expensed as plots legally complete; GBP4.7
million of additional costs incurred due to extended site durations
resulting from reduced productivity levels as we developed our
operational processes under the COVID-19 Secure guidelines; and
GBP4.6 million of incremental costs incurred in responding to
COVID-19, including costs to meet our health and safety
requirements and complying with Government guidelines. This
resulted in a loss for the period of GBP31.5 million.
Cashflow was also significantly impacted by the closure of our
sites, with revenues delayed as completions were held back whilst
we continued to pay trade and land creditor commitments. We
maintained strong cash management and cost discipline throughout
the crisis and retained a net cash position prior to our equity
raise. We ended the period with net cash of GBP497.3 million,
having raised c.GBP510 million in net proceeds through an equity
raise in June for investment in land opportunities over the next 12
months. Our revolving credit facility was drawn in full as a
precaution as we went into the lockdown and has now been fully
repaid and remains undrawn.
UK current trading and outlook
In the nine weeks since our sales centres reopened in England,
our sales rate increased from 0.30 (during shutdown) to 0.70 and
there has been a 206% increase in appointments booked and a 50%
increase in website visits, year on year.
Whilst there remains a high degree of uncertainty in the short
term from both the impact of COVID-19, particularly on employment,
as well as the UK's exit from the European Union, demand has
remained robust and our customers have continued to want to
progress their home purchases. Despite the uncertainty, mortgage
finance has continued to be available and we welcome the positive
lending signals from the banks. The decrease in the Bank of England
base rate to a new historic low in March continues to support
affordability.
As at 26 July 2020, we were c.97% forward sold for private
completions for 2020 (2019 equivalent period: 87%), with very
limited availability of homes for customers to move into in 2020.
This gives us significant confidence for this year's completions,
although reduced availability is likely to mean that sales rates
remain below normal until construction catches up.
Forward indicators remain strong and our order book has
increased in both value and number of homes. We are focused on
building our order book for 2021. Our total order book value stands
at GBP3,022 million (2019 equivalent period: GBP2,516 million),
excluding joint ventures as at 26 July 2020. This order book
represents 12,014 homes (2019 equivalent period: 10,558).
Cancellation numbers have remained low throughout H1 2020. The
cancellation rate for H1 2020 was 21% (H1 2019: 14%), representing
0.8% per week of the private order book (H1 2019: 0.9%).
Cancellation rates peaked in the weeks immediately after we
restarted construction, as customers' completion dates moved, but
have now started to reduce week on week.
Our 2020 completions will be materially impacted by the closure
of sites in March, which means Q4 completions will largely move
into Q1 2021. We are now operating safely at c.80% production
capacity and expect to deliver around 40% less completions in 2020,
compared to 2019. This will have a significant impact on revenues
and margins in 2020 and will have some knock on impact on 2021
delivery. We expect to end 2020 in a net cash position in the range
of GBP550 million to GBP750 million, dependent on the timing of
land purchases.
Our priority has been to protect the business in the short term
while ensuring we position ourselves to take advantage of
opportunities which will strengthen the business for the future and
increase shareholder returns. This includes significant investment
in land , given the short term opportunity, and investing in and
opening new sales outlets, which we expect to continue to grow in
the medium term. We have secured and approved 26 new sites in the
weeks since returning to the land market, with strong financial
metrics despite a weighting towards smaller sites. Opportunities
and the pipeline remain at a high level. We will continue to focus
on driving down cost while running the business in the right way
for the longer term. We expect to emerge from this period of
uncertainty in a strong competitive position and expect to
recommence ordinary dividend payments in 2021 (2020 final). We will
review the special dividend in 2021 for payment in 2022.
Alternative performance measures and other key performance
indicators
* Operating profit or loss is defined as profit or loss on
ordinary activities before net finance costs, exceptional items and
tax, after share of results of joint ventures.
* Operating margin is defined as operating profit or loss
divided by revenue.
** Return on net operating assets (RONOA) is defined as rolling
12 months operating profit or loss divided by the average of the
opening and closing net operating assets of the 12 month period,
which is defined as net assets less net cash, excluding net
taxation balances and accrued dividends.
*** Return on capital employed is defined as rolling 12 months
operating profit or loss divided by the average capital employed
calculated on a monthly basis over the period.
**** Operating cash flow is defined as cash generated by
operations (which is before income taxes paid, interest paid and
payments related to exceptional charges).
Tangible net assets per share is defined as net assets before
any accrued dividends excluding goodwill and intangible assets
divided by the number of ordinary shares in issue at the end of the
period.
Adjusted basic earnings per share represents earnings attributed
to the shareholders of the parent, excluding exceptional items and
tax on exceptional items, divided by the weighted average number of
shares in issue during the period.
* Net operating asset turn is defined as 12 months rolling total
revenue divided by the average of opening and closing net operating
assets of the 12 month period .
(**) WIP turn is defined as total revenue divided by the average
of opening and closing work in progress for the 12 month
period.
(***) The Injury Incidence Rate (IIR) is defined as the number
of incidents per 100,000 employees and contractors, calculated on a
rolling 12 month basis, where the number of employees and
contractors is calculated using a monthly average over the same
period.
(++) Net cash is defined as total cash less total financing.
(++++) Cash conversion is defined as operating cash flow divided
by operating profit or loss on a rolling 12 month basis.
(++++++) Contribution margin is defined as revenue less direct
build costs, less gross land costs and less direct selling
expenses. Contribution margin excludes the impact of supplier
rebates, land provision utilisation and discounting of deferred
land commitments.
(++++++++) Adjusted gearing is defined as adjusted net debt
divided by net assets. Adjusted net debt is defined as net cash
less land creditors.
A reconciliation of alternative performance measures to
statutory measures is disclosed in note 17 of the financial
statements.
- Ends -
A presentation to investors and analysts will be hosted by Chief
Executive Pete Redfern and Group Finance Director Chris Carney via
conference call at 9:00am on Wednesday 29 July 2020. This
presentation will be webcast live on our website:
www.taylorwimpey.co.uk/corporate
An archived version of the webcast will be available on our
website in the afternoon of 29 July 2020.
For further information please contact:
Taylor Wimpey plc Tel: +44 (0) 7826 874 461
Pete Redfern, Chief Executive
Chris Carney, Group Finance Director
Debbie Archibald, Investor Relations
Finsbury TaylorWimpey@Finsbury.com
Faeth Birch
Anjali Unnikrishnan
Notes to editors:
Taylor Wimpey plc is a customer-focused homebuilder, operating
at a local level from 24 regional businesses across the UK. We also
have operations in Spain.
For further information please visit the Group's website:
www.taylorwimpey.co.uk
Follow us on Twitter @TaylorWimpeyplc
COVID-19 overview
During the first half of 2020 the UK housing market was
materially impacted by the UK-wide lockdown in response to the
COVID-19 pandemic. Our first priority has been the health and
safety of our customers, employees, subcontractors and suppliers
and we took an early decision in March to temporarily close all
show homes, sales centres and construction sites to enable us to
put in place detailed COVID-19 Secure health and safety protocols.
We started the phased reopening of our construction sites on 4 May
in England and Wales and on 22 May in Scotland and are now open on
all construction sites and operating at c.80% build capacity. All
sales centres and show homes are open for pre-booked appointments
only. Our small Spanish business underwent a short period of
shutdown and changes to working protocols that impacted first half
completions. Our Spanish business is now fully open, although the
second homes market remains slow.
We have benefited from our investments in IT, training and
development which allowed us to continue to support customers
through this time and protect and grow our order book, at a time of
great uncertainty. Our communication to, and support of
subcontractors through our Pay It Forward scheme, as well as weekly
updates to suppliers and subcontractors has helped the process of
returning to work on Taylor Wimpey sites and strengthened those
relationships.
The pandemic has materially reduced the level of competition for
land and created a disconnect in the land market, resulting in
significant short term opportunities to acquire land from a broad
range of sources at attractive returns.
On 17 June 2020 we announced an opportunity-led equity raise
where we raised net proceeds of c.GBP510 million to take advantage
of these near term opportunities. Our strong balance sheet and net
cash position have given us choices and have meant that we have
been able to maintain our strategy in addition to tightly
controlling cash. These investments, which are continuing to meet
our returns criteria, will support sustainable future growth and
deliver long term value to shareholders.
Operational review
Taylor Wimpey plc is a customer-focused residential developer
building and delivering homes and communities across the UK and in
Spain.
Our operational review is for the UK only as the majority of
metrics do not apply to our Spanish business. A short summary of
the Spanish business follows. The financial analysis is presented
at Group level, which includes Spain, unless otherwise
indicated.
Joint ventures are excluded from the operational review and
Group financial review, unless stated otherwise.
Our key performance indicators (KPIs)
Our KPIs target and measure improvement across the five key
areas of our strategy and tie into remuneration across a number of
levels in the business.
Table 1: KPIs
UK H1 2020 H1 2019 Change FY 2019
Customers and communities at the heart of our strategy
Customer satisfaction 8-week
score
'Would you recommend?' 91% 89% 2.0ppt 89%
-------- -------- --------- --------
Customer satisfaction 9-month
score
'Would you recommend?' 76% 77% (1.0)ppt 77%
-------------------------------------- -------- -------- --------- --------
Build quality: getting it right first time
Construction Quality Review (average
score / 6) 4.31 4.05 6.4% 4.13
-------- -------- --------- --------
Average reportable items per
inspection 0.26 0.28 (7.1)% 0.28
-------- -------- --------- --------
Optimising our strong landbank
Land cost as % of ASP on approvals 20.1% 21.2% (1.1)ppt 16.2%
-------- -------- --------- --------
Landbank years c.6.5 c.5.1 27.5% c.4.8
-------- -------- --------- --------
% of completions from strategically
sourced land 55% 58% (3)ppt 56%
-------- -------- --------- --------
Becoming the employer of choice
Employee turnover % (voluntary)
rolling 12 months 11.1% 12.9% (1.8)ppt 12.9%
-------- -------- --------- --------
Number of people recruited into
early talent programmes: graduates,
management trainees and site
management trainees rolling 12
months 98 152 (35.5)% 116
-------- -------- --------- --------
Directly employed key trades
including trade apprentices 1,110 821 35.2% 1,169
-------- -------- --------- --------
Health and Safety Injury Incidence
Rate (per 100,000 employees and
contractors) rolling 12 months
*** 130 241 (46.1)% 156
-------- -------- --------- --------
Best in class efficient engine room
Net private sales rate per outlet
per week 0.70 1.00 (30.0)% 0.96
-------- -------- --------- --------
Private legal completions per
outlet 8.8 18.8 (53.2)% 48.2
-------- -------- --------- --------
Order book value GBPm 2,904 2,366 22.7% 2,176
-------- -------- --------- --------
Order book volume - no. of homes 11,686 10,137 15.3% 9,725
-------- -------- --------- --------
N.B. The 8-week 'would you recommend' score for H1 2020 relates
to customers who legally completed between October 2019 and March
2020 with the comparator relating to the same period 12 months
prior. The 9-month 'would you recommend' score for H1 2020 relates
to customers who legally completed between October 2018 and March
2019, with the comparator relating to the same period 12 months
prior.
Sales, completions and pricing
Total home completions (excluding joint ventures) decreased by
58% to 2,713 (H1 2019: 6,432) including 637 affordable homes (H1
2019: 1,594), equating to 23.5% of total completions (H1 2019:
24.8%). The reduction in completions is the result of the closure
of construction sites and the gradual scaling up and adjusting to
new COVID-19 Secure principles.
Our net private sales rate for the first half of the year was
0.70 homes per outlet per week (H1 2019: 1.00). Cancellation
numbers have remained low throughout H1 2020. The cancellation rate
for H1 2020 was 21% (H1 2019: 14%), representing 0.8% per week of
the private order book (H1 2019: 0.9%). Average selling prices on
private completions increased by 2.0% to GBP307k (H1 2019:
GBP301k). Our total average selling price increased by 3.1% to
GBP269k (H1 2019: GBP261k), with a slightly larger mix from our
Southern businesses.
Table 2: Year to date sales data
Pre-shutdown During shutdown Post shutdown
Weeks 1-13 Weeks 14-21 Weeks 22-30
Average outlets 240 231 243
------------- ---------------- --------------
Net private sales
rate per outlet
per week 0.97 0.30 0.70
------------- ---------------- --------------
Cancellation rate
(private) 15% 29% 30%
------------- ---------------- --------------
Cancellations /
week as % of private
order book 0.8% 0.5% 1.1%
------------- ---------------- --------------
Order book units 10,917 11,152 12,014
------------- ---------------- --------------
Order book value
GBPm 2,688 2,757 3,022
------------- ---------------- --------------
% of order book
exchanged 69% 70% 67%
------------- ---------------- --------------
N.B. All outlets were physically shut down during weeks 14-21
but 231 average outlets remained open digitally
In recognition of the incredible work our nation's care workers
have done throughout the crisis, we launched a new discount scheme
for NHS staff, care workers and the emergency services offering a
5% discount, applied to homes reserved in 2020 to complete in 2020
and 2021. This initiative has been well received with 1,206 homes
reserved under this scheme as at week ending 26 July 2020.
We have a wide range of products from one-bedroom apartments to
five-bedroom homes. First time buyers accounted for 50% of total
sales in the first half of 2020 (H1 2019: 38%). Investor sales
continued to be at a very low level at 3% (H1 2019: 5%).
During the first half of 2020 approximately 50% of total
customer sales used the Help to Buy scheme (H1 2019: c.40%) of
which 77% were first time buyers (H1 2019: 76%).
As at 28 June 2020, our order book represented 11,686 homes (30
June 2019: 10,137 homes) increasing in value by 23% to GBP2,904
million (30 June 2019: GBP2,366 million), excluding joint ventures.
The Central London order book was 279 homes (30 June 2019: 188
homes), at a value of GBP279 million (30 June 2019: GBP154
million). Our affordable order book stood at 5,119 homes at the
period end (30 June 2019: 4,474 homes).
During the first half of 2020 we opened 39 new outlets (H1 2019:
53).
Customers
We have continued to support our customers during this period
and have focused on how to provide reassurance and make the
homebuying process easier for them, during a challenging time. One
of the biggest challenges of delivering for our customers this year
will be meeting and managing their expectations for completion
dates, some of which have moved significantly because of site
closures.
We have enhanced our digital offering to enable customers to
complete their entire homebuying journey remotely, from registering
their interest through to completion of purchase. We have also
introduced a new series of digital tours so our Sales Executives
can complete digital viewings, which we will continue to
expand.
In monitoring our progress, we continue to asses a broad range
of measures on quality and service. In 2019 we also introduced the
NHBC Construction Quality Review (CQR) score as a new KPI. In H1
2020 we scored an average of 4.31 (H1 2019: 4.05) from a possible
score of six, making us a top quartile major housebuilder. We aim
to improve this further by ensuring our quality assurance processes
are embedded at every stage of build and our target is to maintain
a rating of at least four in each regional business.
We are pleased that we are operating at above 90% customer
satisfaction, the level recognised as being a five-star builder
according to the Home Builders Federation (HBF) 8-week customer
survey, achieving a score of 91% for the first half of 2020. We
also encourage customers to leave reviews on Trustpilot. We
currently have a 4 out of 5 star rating with a TrustScore of 4.0
out of 5.
Land
Our short term landbank stood at c.77k plots, as at 28 June 2020
(31 December 2019: c.76k plots). We completed fewer than usual land
transactions in the first half reflecting our decision to put land
acquisition on hold in March until recommencing activity in the
second quarter. These acquisitions also reflect our focus, outlined
at the full year results, on acquiring smaller site sizes. As a
result, we approved 5,167 plots during the first half of 2020 (H1
2019: 5,846) at an average contribution margin (++++++) of 28.5%
and return on capital employed*** of 34.8%, with an average size of
258 plots.
Our strategic land pipeline stood at c.138k potential plots as
at 28 June 2020 (31 December 2019: c.140k potential plots). During
the first six months of 2020 we converted a further 2,501 plots
from the strategic pipeline to the short term landbank (H1 2019:
4,165 plots). In the period, 55% of our completions were sourced
from the strategic pipeline (H1 2019: 58%).
The average cost of land as a proportion of average selling
price within the short term owned landbank remains low at 14.8% (H1
2019: 15.3%). The estimated average selling price in the short term
owned landbank in H1 2020 was GBP288k (H1 2019: GBP284k).
We prioritise engaging with local communities as part of the
planning and construction process and strive to make a positive
impact in the wider community and have looked for more innovative
ways of doing this during this period. We continued to progress
planning through the shutdown period and were pleased to have
achieved the UK's first significant planning permission remotely.
In the first half of 2020, through our planning obligations, we
have contributed over GBP92 million to the local communities in
which we build (H1 2019: GBP196 million). This provides vital local
infrastructure, affordable homes, public transport and education
facilities.
Increased land opportunities
Our high-quality landbank remains a key competitive advantage
and value driver and we are adding further high quality land at
attractive prices to benefit shareholder returns.
The land market continues to be attractive for buyers with
capital and liquidity, who can offer certainty and the ability to
execute. Through the second quarter we saw an increased level of
deals returning to market, with other buyers unable or unwilling to
continue to complete on their previously agreed terms. We intend to
use the proceeds of our recently completed equity raise to take
advantage of these short term opportunities, in addition to our
planned land expenditure, over the next 6-12 months.
Our new purchases include conservative assumptions on selling
rates and reflect increased costs in relation to potential changes
as a result of new environmental legislation.
Since we recommenced land activity in the second quarter, we
have approved or contracted 26 land deals at a total cost of GBP346
million. These sites have an average return on capital of c.35% and
an average operating margin above our medium term target of
c.21-22%. The sites represent 6,165 plots in good locations broadly
spread across our three divisions with an average site size of 237
plots, reflecting our focus on increasing the proportion of smaller
sites in our mix. Smaller sites typically offer a higher return on
capital but lower operating margins than larger sites, so it is
pleasing that we have been able to advance this strategy at margins
above our target range.
The number of new opportunities is continuing to improve and our
total pipeline now stands at over 80 sites and almost 30,000 plots
under discussion and consideration.
Employees
With 24 regional businesses across the country, we are a
significant local employer, employing on average 6,024 people (H1
2019: 5,613) directly, with thousands more working with us through
subcontractors and suppliers.
Our employees have shown great commitment and flexibility
throughout this period enabling us to maintain strong relationships
with our customers and protect the order book, and safely restart
operations on our sites. All of our employees have returned to work
from furlough and we have now returned the furlough subsidies to
the Government.
Our employees have been engaged throughout the crisis and we
believe their dedication will ensure we are able to respond quickly
to any opportunities we see. Our rolling 12 months voluntary
employee turnover rate remained low at 11.1% (H1 2019: 12.9%) with
no redundancies made as a result of COVID-19.
We have 1,110 directly employed key tradespeople, including
apprentices, as at 28 June 2020, a 35% increase year on year. In
the 12 months to 28 June 2020, we recruited 98 people into our
early talent management schemes (H1 2019 12 months rolling: 152),
to meet our business requirement and reflecting our low employee
turnover.
Employee communication and engagement has been vital in this
period. We have introduced a new series of 'pulse' employee surveys
to regularly gain feedback from our employees on key matters. 98%
of our employees said they feel positive about how the Company
supported them whilst on furlough and 97% are comfortable with the
arrangements the Company has put in place to protect their
safety.
With the business fully open, and all employees returned to
work, Executive Director salaries and Non Executive Director fees
will return to normal from the beginning of August.
We are delighted that TheJobCrowd have recognised us as one of
the country's best places to work for Graduates and Apprentices in
2020/21. Based on employee feedback, we were ranked first among
property and housebuilding companies for Apprentices, and second
for Graduates. We were also pleased to have been named in the top
50 places to work in the UK for 2020 by Glassdoor, as voted for by
employees, for the third consecutive year.
Suppliers, subcontractors and partners
The health and safety of individuals on our sites will always be
our number one priority. Our Injury Incidence Rate (IIR) for
reportable injuries per 100,000 employees and contractors was 130
on a rolling 12 months basis to 28 June 2020 (2019 equivalent
period: 241).
Our strong culture and processes have assisted in implementing
the Taylor Wimpey COVID-19 Code of Conduct and we continue to
receive good feedback from both our employees and subcontractors.
Our Pay It Forward scheme has been welcomed, and replicated, by our
subcontractors and has had a positive impact on getting our sites
back up and running efficiently.
Our employees' dedication to local communities has been
demonstrated throughout the COVID-19 crisis, donating and making
vital PPE for care homes, volunteering for the NHS and within their
communities and raising funds for charities.
Build costs
We have been reassured by the availability of both labour and
material as we have returned to sites. We remain focused on cost
and increased discipline. Our central procurement team is targeting
improvements in visibility and availability of material selection
that will help avoid material shortages and help mitigate future
price increases.
As set out earlier, as a result of COVID-19 we had
non-productive and incremental costs in the period which increased
build costs. However, as production capacity is now at 80% and
improving, we would expect non-productive and incremental costs to
gradually reduce over the balance of the year.
We achieved an annual return on net operating assets for the
Group of 16.8% in the first half of 2020 (H1 2019: 29.4%). The
annual return on net operating assets for the UK business was 16.4%
in the first half of 2020 (H1 2019: 29.2%). Our UK net operating
asset turn * was 1.08 times (H1 2019: 1.42 times).
Dividends
In order to conserve cash and increase flexibility at the outset
of the pandemic we took the decision to cancel the 2020 final
dividend of 3.80 pence per share (c.GBP125 million) which was due
to be paid on 15 May 2020, and the planned special dividend payment
of 10.99 pence per share (c.GBP360 million), which was due to be
paid on 10 July 2020. Although our Ordinary Dividend Policy has
been the subject of prudent and comprehensive stress testing
against various downside scenarios, including a 20% reduction in
prices and a 30% reduction in volumes, and is payable through a
normal downturn, the COVID-19 pandemic represents a highly unusual
set of circumstances. We expect to resume the payment of an
ordinary dividend in 2021 (2020 final) and will review the special
dividend in 2021 for payment in 2022.
Spain
As in the UK, our Spanish business has faced market disruption
during the COVID-19 pandemic. Our construction sites were closed
for a relatively short period of between two and three weeks in
March, whilst we installed health and safety measures, but are now
up and running and operating efficiently.
There has been a more prolonged impact on sales activity given
COVID-19 limitations on travel. This has impacted our international
customer base, with new reservations mainly comprising Spanish
nationals and existing residents in Spain purchasing holiday
homes.
We completed 58 homes in the first half of 2020 (H1 2019: 109)
at an average selling price of EUR407k (H1 2019: EUR434k), with
prices reflecting mix impacts. Gross margin increased to 27.0% ( H1
2019: 25.3%) . The business delivered an operating profit of GBP3.5
million for the first half of 2020 (H1 2019: GBP8.1 million),
reflecting the lower completions, and an operating profit margin of
17.2% (H1 2019: 19.7%).
Our total order book as at 28 June 2020 was 209 homes (30 June
2019: 312 homes). The total plots in the landbank stood at 2,791
(31 December 2019: 2,841), with net operating assets at GBP98.6
million (31 December 2019: GBP78.1 million). We have not seen a
material impact on cancellations, and we have continued to complete
on properties as expected . W e c ontinue to invest in work in
progress to deliver our strong order book.
Group financial review of operations
The Group uses Alternative Performance Measures (APMs) as key
financial performance indicators to assess underlying performance
of the Group. The APMs used are widely used industry measures and
form the measurement basis of the key strategic KPIs (return on net
operating assets, operating margin and cash conversion (++++) ). A
portion of executive remuneration is also directly linked to some
of the APMs. Definitions and reconciliations to the equivalent
statutory measures are included in note 17 of the financial
statements.
Income statement
Group revenue decreased by 56.4% to GBP754.6 million in the
first half of 2020 (H1 2019: GBP1,732.7 million), reflecting the
unprecedented impact of COVID-19 on the Group. UK volumes excluding
JVs decreased by 57.8% to 2,713 completions (H1 2019: 6,432) with
UK average selling prices up 3.1% to GBP269k (H1 2019: GBP261k).
Average selling prices on private completions increased by 2.0% to
GBP307k (H1 2019: GBP301k) in the UK, due to larger average plot
sizes, and an increased proportion of completions from our Southern
businesses compared with 2019.
During the period we have identified and expensed GBP39.2
million of costs relating to the COVID-19 pandemic, with GBP38.3
million charged to gross profit and GBP0.9 million to overheads.
These costs include unproductive site overhead costs incurred
during the controlled closure and lockdown period which would
ordinarily be capitalised to WIP and expensed as plots legally
complete of GBP29.9 million; additional costs incurred by the
business due to extended site durations resulting from the reduced
productivity levels as we develop our operational processes under
the COVID-19 Secure guidelines totalling GBP4.7 million; and
incremental costs incurred by the business in responding to
COVID-19, including to meet our health and safety requirements and
complying with Government guidelines, of GBP4.6 million.
Cost of sales reduced to GBP663.6 million (H1 2019 GBP1,323.1
million) in the period as the total cost of land, build and direct
selling expenses reduced, reflecting the reduction in
completions.
Group gross profit of GBP91.0 million (H1 2019: GBP409.6
million) decreased by 77.8% and includes the impact of COVID-19
related costs, as discussed above, as well as fixed build and
direct selling costs which are absorbed across fewer completions. A
positive contribution from previously written down inventory of
GBP0.7 million was included (H1 2019: GBP3.6 million).
During the period, completions from joint ventures were 35 (H1
2019: 66), as a result of delays due to site closures. The total
order book value of joint ventures as at 28 June 2020 was GBP90
million (30 June 2019: GBP54 million), representing 183 homes (30
June 2019: 133). Our share of results of joint ventures in the
period was a loss of GBP1.8 million (H1 2019: loss of GBP0.2
million).
As a result of the decrease in volumes and additional costs in
relation to COVID-19 the Group operating profit decreased to a loss
of GBP16.1 million (H1 2019: GBP311.9 million profit) and an
operating margin of (2.1)% (H1 2019: 18.0%).
Loss on ordinary activities before finance costs was GBP24.3
million (H1 2019: GBP312.1 million profit), reflecting the impact
of reduced volumes and the exceptional costs incurred of GBP10.0
million (H1 2019: no exceptional charge).
Net finance costs for the period were GBP13.7 million (H1 2019:
GBP12.1 million). The increase was due to the interest payable on
the revolving credit facility that was fully drawn for part of the
period and repaid prior to period end. This was partially offset by
a decrease in the interest charge on the defined benefit pension
scheme. In addition, changes in foreign exchange rates in the
period resulted in a small foreign exchange gain compared with a
small loss in the comparative period.
Loss before tax and exceptional items for the period was GBP29.8
million (H1 2019: GBP299.8 million profit). The pre-exceptional tax
credit was GBP6.6 million (H1 2019: GBP57.8 million charge) with an
effective tax rate of 22.1% (H1 2019: 19.3%). The effective tax
rate includes a GBP1.3 million credit (H1 2019: nil) arising from
the remeasurement of the Group's UK deferred tax assets at 19.0%
following the changes to the corporation tax rates enacted by the
UK Government. This resulted in a loss before exceptional items,
for the half year of GBP23.2 million (H1 2019: GBP242.0 million
profit).
The Group discloses material financial impacts arising from
events which are one-off or unusual in nature as exceptional items.
Having reviewed ongoing works to replace Aluminium Composite
Material (ACM) cladding on a small number of legacy buildings a
further GBP10.0 million has been provided for expected costs to
complete the works.
Loss before tax for the period was GBP39.8 million (H1 2019:
GBP299.8 million profit) after the exceptional charge of GBP10.0
million (H1 2019: no exceptional charges in the period). Loss after
tax for the period was GBP31.5 million (H1 2019: GBP242.0 million
profit).
Basic loss per share was 1.0 pence (H1 2019: 7.4 pence earnings
per share). The adjusted basic loss per share was 0.7 pence (H1
2019: 7.4 pence earnings per share).
Balance sheet
Net operating assets increased over the course of the period by
GBP443.6 million to GBP3,243.8 million at 28 June 2020 (31 December
2019: GBP2,800.2 million). Inventories have increased by GBP347.4
million reflecting an increase in the first half in work in
progress of GBP277.0 million, as completions were delayed due to
closure of our sites and an increase in land of GBP70.4 million.
Land creditors decreased by GBP98.6 million following repayments
made in the period and the temporary pause in new land acquisitions
in response to the COVID-19 uncertainties. Return on net operating
assets was 16.8% (H1 2019: 29.4%). Group net operating asset turn
was 1.08 times (H1 2019: 1.42 times, FY 2019: 1.60 times).
Average work in progress per UK outlet at 28 June 2020 increased
by 13.8% to GBP6.6 million (31 December 2019: GBP5.8 million) and
UK work in progress turn (**) decreased to 2.05 times (30 June
2019: 2.66) as a result of the impact of delayed legal
completions.
As at the balance sheet date, the Group held certain land and
work in progress that had previously been written down by GBP70.1
million (31 December 2019: GBP68.6 million) to a net realisable
value of GBP64.0 million as development continues (31 December
2019: GBP59.3 million). The balance of written down land and work
in progress in the UK was GBP42.7 million (31 December 2019:
GBP39.0 million), following the associated write-down of GBP29.7
million (31 December 2019: GBP30.5 million). The overall increase
in the provision since the prior year end being due to foreign
exchange movements in the balance held by the Spanish
operations.
As at 28 June 2020, the UK short term landbank comprised 77,338
plots, with a net book value of GBP2.4 billion. Short term owned
land comprised GBP2.3 billion (31 December 2019: GBP2.3 billion),
representing 54,201 plots (31 December 2019: 54,641). The
controlled short term landbank represented 23,137 plots (31
December 2019: 20,971). The value of long term owned land increased
to GBP189 million (31 December 2019: GBP97 million), representing
35,628 plots (31 December 2019: 33,329), with a further total
controlled strategic pipeline of 102,161 plots (31 December 2019:
106,895). Total potential revenue in the owned and controlled
landbank increased to GBP54 billion in the period (31 December
2019: GBP53 billion), reflecting the overall mix of opportunities
in the short term landbank and strategic pipeline.
As at 28 June 2020, in the UK, 89% of the short term owned and
controlled landbank was purchased after 2009, 58% of which was
sourced through our strategic pipeline. This results in a land cost
to average selling price in the short term owned landbank of 14.8%
(31 December 2019: 14.9%).
Land creditors decreased to GBP630.6 million (31 December 2019:
GBP729.2 million) and, combined with net cash, resulted in a lower
adjusted gearing (++++++++) of 3.5% (31 December 2019: 5.5%).
Included within the land creditor balance is GBP53.3 million of UK
land overage commitments (31 December 2019: GBP56.4 million).
GBP286.8 million of Group land creditors are expected to be paid
within 12 months and GBP343.8 million thereafter.
Provisions increased to GBP129.6 million (31 December 2019:
GBP128.4 million) as the GBP10.0 million increase in the Aluminium
Composite Material (ACM) cladding replacement provision was largely
offset by utilisation as claims were made and processed through the
ground rent assistance scheme and costs were incurred on work
performed to replace ACM cladding.
Our net deferred tax asset of GBP37.4 million (31 December 2019:
GBP29.8 million) relates to our pension deficit, employee share
schemes and the temporary differences of our Spanish business,
including brought forward trading losses.
Net assets at 28 June 2020 stood at GBP3,755.2 million (30 June
2019: GBP3,007.6 million, 31 December 2019: GBP3,307.8
million).
Pensions
As previously announced, further to our 31 December 2016
triennial valuation, we agreed a recovery plan with the Trustee to
December 2020. This included a contribution mechanism, tested
quarterly, such that should the Taylor Wimpey Pension Scheme (TWPS)
become fully funded on the Technical Provisions funding basis,
further contributions would be suspended and only recommence if the
funding level fell below 96%.
The quarterly funding test for 31 December 2018 showed that the
TWPS funding level had fallen to 94%, as a result the Group
recommenced regular contributions from January 2019. By the end of
31 December 2019, the funding level had improved to 97%. However,
along with many other UK pension schemes, the funding level has
fallen during the first half of 2020 as a result of the economic
volatility arising from the COVID-19 pandemic. During April 2020
and in response to the site shutdowns, we agreed with the Trustee a
temporary suspension of the agreed contributions for three months
between April and June. These suspended contributions will instead
be paid between January 2021 and March 2021.
The most recent funding test at 28 June 2020 showed a deficit of
GBP217 million and a funding level of 92%. As a result, regular
contributions will continue. The Group continues to provide a
contribution for Scheme expenses and also makes contributions via
the Pension Funding Partnership. Total Scheme contributions and
expenses are expected to be GBP37.1 million in 2020 (2019: GBP47.1
million), assuming the TWPS remains less than 100% funded.
Following the deferment of contributions, contributions of GBP10.8
million, including expenses, are expected to be paid between
January 2021 and March 2021.
Retirement benefit obligations of GBP114.7 million at 28 June
2020 (31 December 2019: GBP85.0 million) comprise a defined benefit
pension liability of GBP114.2 million (31 December 2019: GBP84.5
million) and a post-retirement healthcare liability of GBP0.5
million (31 December 2019: GBP0.5 million).
The Group continues to work closely with the Trustee in managing
pension risks, including management of interest rate, inflation and
longevity risks. The Company and Trustee are currently discussing
the results of the triennial valuation at 31 December 2019. The
valuation and any recovery plan are due to be agreed by 31 March
2021 in line with requirements.
The underlying volatility of the TWPS remains low due to the
c.GBP200 million buy-in completed in 2014 (covering c.10% of the
liabilities), combined with c.90% liability hedging against
interest rates and inflation risk exposure on the Scheme's long
term, 'self-sufficiency' basis.
Cash flow
Net cash decreased to GBP497.3 million at 28 June 2020 from
GBP545.7 million at 31 December 2019, primarily as a result of a
net cash outflow from operating activities of GBP523.7 million and
an increase in investments in joint ventures of GBP23.7 million
being predominantly offset by net proceeds from the issuance of
shares in June 2020 of c.GBP510.1 million.
The main driver of the net cash outflow from operating
activities in the first half of 2020 was an increase in land and
work in progress working capital of GBP423.8 million as we settled
land creditor obligations, continued investment in land and the
number of completions decreased. During the period there was also
an overall decrease in payables as payments were made during the
time that our construction sites were closed but they were not
replaced at the same rate due to the lower levels of construction
activity.
When the Group initially shut its sites in late March 2020 it
took the prudent step of fully drawing down the previously
unutilised GBP550 million revolving credit facility. Once
construction had restarted under new operating protocols the
facility was fully repaid before the end of the current period.
In the 12 months to 28 June 2020 we converted 46.5% of operating
profit into operating cash flow**** (H1 2019 rolling 12 months:
71.3%).
Financing structure
At 28 June 2020 our committed borrowing facilities were GBP654.5
million which comprises EUR100 million loan notes due June 2023,
EUR15 million loan maturing December 2021 and an undrawn GBP550
million revolving credit facility maturing February 2025. Average
net cash for the period was GBP241.5 million (30 June 2019:
GBP290.6 million; 31 December 2019: GBP157.0 million). At the start
of 2020 we extended the term of the GBP550 million revolving credit
facility by a further year to 2025, resulting in an average
maturity of the committed borrowing facilities of 4.3 years.
Dividends
In order to conserve cash and increase flexibility at the outset
of the pandemic we took the decision to cancel the 2020 final
dividend of 3.80 pence per share (c.GBP125 million) which was due
to be paid on 15 May 2020 and the planned special dividend payment
of 10.99 pence per share (c.GBP360 million) which was due to be
paid on 10 July 2020. Although our Ordinary Dividend Policy has
been the subject of prudent and comprehensive stress testing
against various downside scenarios, including a 20% reduction in
prices and a 30% reduction in volumes, and is payable through a
normal downturn, the COVID-19 pandemic represents a highly unusual
set of circumstances. We expect to resume the payment of an
ordinary dividend in 2021 (2020 final) and will review the special
dividend in 2021 for payment in 2022.
Going concern
The Directors remain of the view that the Group's financing
arrangements and balance sheet strength provide both the necessary
facilities and covenant headroom to enable the Group to conduct its
business for at least the next 12 months. Accordingly, the
consolidated financial statements are prepared on a going concern
basis, see note 1 of the financial statements for further details
of the assessment performed.
Principal Risks and uncertainties
As with any business, Taylor Wimpey's operational performance
and ability to achieve its strategic objectives are subject to
several potential risks and uncertainties. The Board takes a
proactive approach to the management of these and regularly reviews
both internal and external factors to identify and assess their
impact on the business. These risks and uncertainties are then
managed through effective mitigating controls and the development
of action plans, with the continual monitoring of progress against
agreed KPIs as an integral part of the business process and core
activities.
The Board assesses and monitors the Principal Risks of the
business regularly. Set out in the Group's Annual Report and
Accounts for the year ended 31 December 2019 were details of the
Principal Risks and uncertainties for the Group and the key
mitigating activities used to address them at that time.
A global health pandemic was previously identified as one of our
Emerging Risks but the speed with which it materialised and the
direct and indirect impact it had on the business, during such a
short period, has demonstrated the fundamental importance of having
a robust risk management process in place.
The Group implemented a number of measures to ensure the health
and safety of our employees, customers and suppliers. This included
closure of our construction sites and sales centres, and creation
of a COVID-19 working group to provide guidance, support and
direction to all our employees and our customers, suppliers and
contractor base at the onset of the pandemic, throughout the
lockdown phase and during the re-mobilisation of the business. We
have engaged with the Government and sector specific bodies to
develop COVID-19 working protocols that meet the Government
guidance. To assist the wider sector, we have made these available
to other housebuilders. The Group will continue to monitor
Government guidance carefully, including the impact of localised
lockdowns, and where needed adapt its operational protocols and
processes to safeguard our employees and customers. We are pleased
with how resilient we have demonstrated ourselves to be and we
remain optimistic about being able to effectively manage this risk
and its continued impact on our business operations.
The Board's latest risk assessment has considered both the
specific consequences of COVID-19 and its effect on the underlying
Principal Risks managed by the business.
We have not established a new Principal Risk for the COVID-19
pandemic; instead, due to its pervasive nature, we recognise the
impact it has had and will continue to have on our entire risk
landscape. It has impacted the inherent nature of five of our
existing Principal Risks, as reflected in the table below. However,
due to the additional mitigating actions that have been
implemented, there is no fundamental change to the overall residual
assessment of our Principal Risks. We will continue to closely
monitor the situation over the coming period and will take any
required action to maintain control over the impact. Additionally,
a new key risk has been added into our operational risk framework
to reflect the impact of possible site closures, should Government
guidance change on either a localised or national level.
Principal Risk Potential Impact from COVID-19
Impact of the market The macro-economic impact of COVID-19
environment on mortgage could reduce mortgage affordability
availability and housing and therefore impact on demand for housing
demand as
* uncertainty and unemployment affect customer
confidence
* constraints on mortgage availability, or higher costs
of mortgage funding
-------------------------------------------------------------
Material costs and availability Disruptions to the supply chain stability
of subcontractors and to suppliers / subcontractors.
-------------------------------------------------------------
Ability to attract and We have retained a stable workforce
retain high-calibre during the pandemic with staff attrition
employees rates lower than normal. Due to this
we have seen no loss of talent and therefore
the need to attract new staff has diminished.
This is viewed as a short term effect
with the expectation of a more 'normal'
pattern resuming in the future.
-------------------------------------------------------------
Quality and reputation COVID -19 increases the risk of reputational
damage if we are not recognised to be
doing the right thing for our employees,
customers and suppliers.
-------------------------------------------------------------
Site and product safety There is an increased inherent risk
from any personal interaction given
the nature of COVID-19, in particular
as lockdown measures are eased.
-------------------------------------------------------------
Further details of the Group's Principal Risks and the
mitigations in place are outlined on pages 48 to 52 of the 2019
Annual Report and Accounts, published in March 2020, which is
available at www.taylorwimpey.co.uk . These are summarised below,
in no order of significance, and we believe that they continue to
be the Principal Risks to the business, with appropriate ongoing
mitigations and monitoring in place.
-- Government policy and planning regulations
-- Impact of the market environment on mortgage availability and housing demand
-- Material costs and availability of subcontractors
-- Ability to attract and retain high-calibre employees
-- Land purchasing
-- Quality and reputation
-- Site and product safety
Finally, as an organisation, we continue to recognise the risks
associated with leaving the EU. The Board views these potential
risks as an integral part of our Principal Risks rather than as
separate standalone risks. We have identified a potential impact on
our supply chain, labour force and overall economic market
impacting mortgage availability and demand. We continue to monitor
the progress of the negotiations and with this our assessment of
the likely impact together with mitigations.
Cautionary note concerning forward looking statements
This announcement includes statements that are, or may be deemed
to be, 'forward-looking statements'. These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms 'believes', 'estimates', 'plans',
'projects', 'anticipates' or 'expects'. Such statements are based
on current expectations and assumptions and are subject to a number
of risks and uncertainties that could cause actual events or
results to differ materially from any expected future events or
results expressed or implied in these forward-looking
statements.
Accordingly, there are or will be important factors that could
cause Taylor Wimpey Plc's actual results to differ materially from
those indicated in these statements. Persons receiving this
announcement should not place reliance on forward-looking
statements. Forward-looking statements speak only as of the date
they are made and, except as required by applicable law or
regulation, Taylor Wimpey Plc undertakes no obligation to update
these forward-looking statements. Nothing in this statement should
be construed as a profit forecast.
Taylor Wimpey plc
Condensed Consolidated Income Statement
For the half year ended 28 June 2020
(Reviewed) (Reviewed) (Audited)
Half Half year Half Half Half Half Year Year Year
year ended year year year year ended ended ended
ended 28 ended ended ended ended 31 December 31 December 31
28 June 2020 28 30 30 30 2019 2019 December
June June June June June 2019
2020 2020 2019 2019 2019
----------- ----------- ------- ----------- ----------- --------- ----------- ----------- ---------
Before Before Before
exceptional Exceptional exceptional Exceptional exceptional Exceptional
GBP million Note items items Total items items Total items items Total
---------------- ---- ----------- ----------- ------- ----------- ----------- --------- ----------- ----------- ---------
Continuing
operations
Revenue 2 754.6 - 754.6 1,732.7 - 1,732.7 4,341.3 - 4,341.3
Cost of sales (663.6) - (663.6) (1,323.1) - (1,323.1) (3,297.2) - (3,297.2)
================ ==== =========== =========== ======= =========== =========== ========= =========== =========== =========
Gross profit
before
positive
contribution 90.3 - 90.3 406.0 - 406.0 1,034.0 - 1,034.0
Positive
contribution
from written
down
inventory 0.7 - 0.7 3.6 - 3.6 10.1 - 10.1
================ ==== =========== =========== ======= =========== =========== ========= =========== =========== =========
Gross profit 91.0 - 91.0 409.6 - 409.6 1,044.1 - 1,044.1
Net operating
expenses 4 (105.3) (10.0) (115.3) (97.5) - (97.5) (201.6) 14.3 (187.3)
(Loss)/profit on
ordinary
activities
before finance
costs (14.3) (10.0) (24.3) 312.1 - 312.1 842.5 14.3 856.8
Finance income 5 1.9 - 1.9 1.8 - 1.8 2.9 - 2.9
Finance costs 5 (15.6) - (15.6) (13.9) - (13.9) (31.8) - (31.8)
Share of results
of joint
ventures (1.8) - (1.8) (0.2) - (0.2) 8.0 - 8.0
---------------- ---- ----------- ----------- ------- ----------- ----------- --------- =========== =========== =========
(Loss)/profit
before
taxation (29.8) (10.0) (39.8) 299.8 - 299.8 821.6 14.3 835.9
Taxation
credit/(charge) 6 6.6 1.7 8.3 (57.8) - (57.8) (159.3) (2.7) (162.0)
---------------- ---- ----------- ----------- ------- ----------- ----------- --------- =========== =========== =========
(Loss)/profit
for
the period (23.2) (8.3) (31.5) 242.0 - 242.0 662.3 11.6 673.9
---------------- ---- ----------- ----------- ------- ----------- ----------- --------- ----------- ----------- ---------
Basic
(loss)/earnings
per share 7 (1.0)p 7.4p 20.6p
Diluted (loss)/
earnings
per share 7 (1.0)p 7.4p 20.6p
Adjusted basic
(loss)/
earnings per
share 7 (0.7)p 7.4p 20.3p
Adjusted diluted
(loss)/
earnings
per share 7 (0.7)p 7.4p 20.2p
---------------- ---- ----------- ----------- ------- ----------- ----------- --------- ----------- ----------- ---------
All of the (loss)/profit for the period is attributable to the
equity holders of the parent company.
Taylor Wimpey plc
Condensed Consolidated Statement of Comprehensive Income
For the half year ended 28 June 2020
Half year ended 28 Half year ended 30 Year ended
June 2020 June 2019 31 December 2019
GBP million (Reviewed) (Reviewed) (Audited)
-------------------------------------------------------- ------------------ ------------------ -----------------
Items that may be reclassified subsequently to profit or
loss:
Exchange differences on translation of foreign operations 6.0 (0.6) (5.5)
Movement in fair value of hedging instruments (4.9) 0.5 4.1
Items that will not be reclassified subsequently to
profit or loss:
Actuarial (loss)/gain on defined benefit pension schemes (43.7) 6.7 (8.9)
Tax credit/(charge) on items taken directly to other
comprehensive income 10.0 (0.6) 1.7
--------------------------------------------------------- ------------------ ------------------ -----------------
Other comprehensive (expense)/income for the period net
of tax (32.6) 6.0 (8.6)
(Loss)/profit for the period (31.5) 242.0 673.9
--------------------------------------------------------- ------------------ ------------------ -----------------
Total comprehensive (expense)/income for the period (64.1) 248.0 665.3
--------------------------------------------------------- ------------------ ------------------ -----------------
All of the comprehensive (expense)/income for the period is
attributable to the equity holders of the parent company.
Taylor Wimpey plc
Condensed Consolidated Balance Sheet
As at 28 June 2020
28 June 30 June 31 December 2019
GBP million Note 2020 (Reviewed) 2019 (Reviewed) (Audited)
------------------------------- ---- ---------------- ----------------- ----------------
Non-current assets
Intangible assets 8.1 5.6 7.0
Property, plant and equipment 25.3 21.2 25.6
Right-of-use assets 24.4 25.7 27.4
Interests in joint ventures 77.1 69.9 55.3
Trade and other receivables 42.0 48.5 43.7
Deferred tax assets 37.4 35.3 29.8
------------------------------- ---- ---------------- ----------------- ================
214.3 206.2 188.8
------------------------------- ---- ---------------- ----------------- ================
Current assets
Inventories 4,543.4 4,415.0 4,196.0
Trade and other receivables 144.0 187.9 161.0
Tax receivables - 0.6 -
Cash and cash equivalents 8 601.8 481.3 630.4
================
5,289.2 5,084.8 4,987.4
------------------------------- ---- ---------------- ----------------- ================
Total assets 5,503.5 5,291.0 5,176.2
------------------------------- ---- ---------------- ----------------- ================
Current liabilities
Trade and other payables (901.9) (1,044.0) (974.8)
Lease liabilities (7.1) (6.6) (7.6)
Tax payables (23.3) (52.0) (67.9)
Provisions 11 (72.3) (67.4) (72.7)
Accrued dividends 14 - (350.0) -
(1,004.6) (1,520.0) (1,123.0)
------------------------------- ---- ---------------- ----------------- ----------------
Net current assets 4,284.6 3,564.8 3,864.4
------------------------------- ---- ---------------- ----------------- ----------------
Non-current liabilities
Trade and other payables (449.5) (473.3) (499.7)
Lease liabilities (17.7) (19.4) (20.3)
Bank and other loans 8 (104.5) (89.3) (84.7)
Retirement benefit obligations 9 (114.7) (103.6) (85.0)
Provisions 11 (57.3) (77.8) (55.7)
------------------------------- ---- ---------------- ----------------- ================
(743.7) (763.4) (745.4)
------------------------------- ---- ---------------- ----------------- ================
Total liabilities (1,748.3) (2,283.4) (1,868.4)
------------------------------- ---- ---------------- ----------------- ================
Net assets 3,755.2 3,007.6 3,307.8
------------------------------- ---- ---------------- ----------------- ----------------
Equity
Share capital 12 292.2 288.5 288.6
Share premium 771.5 762.9 762.9
Own shares (12.3) (18.0) (17.6)
Other reserves 543.8 44.9 43.6
Retained earnings 2,160.0 1,929.3 2,230.3
------------------------------- ---- ---------------- ----------------- ================
Total equity 3,755.2 3,007.6 3,307.8
------------------------------- ---- ---------------- ----------------- ----------------
Taylor Wimpey plc
Condensed Consolidated Statement of Changes in Equity
For the half year ended 28 June 2020
Reviewed half year ended 28 June 2020 Share Own Total
GBP million capital Share premium shares Other reserves Retained earnings
------------------------------------- -------- ------------- ------- -------------- ----------------- -------
Balance as at 1 January 2020 288.6 762.9 (17.6) 43.6 2,230.3 3,307.8
Other comprehensive income/(expense)
for the period - - - 1.1 (33.7) (32.6)
Loss for the period - - - - (31.5) (31.5)
-------------------------------------- -------- ------------- ------- -------------- ----------------- -------
Total comprehensive income/(expense)
for the period - - - 1.1 (65.2) (64.1)
New share capital subscribed 3.6 8.6 - 499.1 - 511.3
Utilisation of own shares - - 5.3 - - 5.3
Cash cost of satisfying share options - - - - (6.0) (6.0)
Share-based payment credit - - - - 1.4 1.4
Tax charge on items taken directly to
statement of changes in equity - - - - (0.5) (0.5)
Total equity at 28 June 2020 292.2 771.5 (12.3) 543.8 2,160.0 3,755.2
-------------------------------------- -------- ------------- ------- -------------- ----------------- -------
Reviewed half year ended 30 June 2019 Share Own Other Total
GBP million capital Share premium shares reserves Retained earnings
------------------------------------------ -------- ------------- ------- --------- ----------------- -------
Balance as at 1 January 2019 288.5 762.9 (22.7) 45.0 2,153.1 3,226.8
Other comprehensive income for the period - - - (0.1) 6.1 6.0
Profit for the period - - - - 242.0 242.0
------------------------------------------- -------- ------------- ------- --------- ----------------- -------
Total comprehensive income for the period - - - (0.1) 248.1 248.0
Utilisation of own shares - - 4.7 - - 4.7
Cash cost of satisfying share options - - - - (2.1) (2.1)
Share-based payment credit - - - - 4.3 4.3
Tax credit on items taken directly to
statement of changes in equity - - - - 0.1 0.1
Dividends approved and paid - - - - (124.2) (124.2)
Dividends approved - - - - (350.0) (350.0)
------------------------------------------- -------- ------------- ------- --------- ----------------- -------
Total equity at 30 June 2019 288.5 762.9 (18.0) 44.9 1,929.3 3,007.6
------------------------------------------- -------- ------------- ------- --------- ----------------- -------
Audited year ended 31 December Total
2019 Other
GBP million Share capital Share premium Own shares reserves Retained earnings
---------------------------------- ------------- ------------- ---------- --------- ----------------- -------
Balance as at 1 January 2019 288.5 762.9 (22.7) 45.0 2,153.1 3,226.8
Other comprehensive expense for the
year - - - (1.4) (7.2) (8.6)
Profit for the year - - - - 673.9 673.9
----------------------------------- ------------- ------------- ---------- --------- ----------------- -------
Total comprehensive income for the
year - - - (1.4) 666.7 665.3
New share capital subscribed 0.1 - - - - 0.1
Utilisation of own shares - - 5.1 - - 5.1
Cash cost of satisfying share
options - - - - 0.3 0.3
Share-based payment credit - - - - 8.0 8.0
Tax credit on items taken directly
to statement of changes in equity - - - - 1.9 1.9
Dividends approved and paid - - - - (599.7) (599.7)
----------------------------------- ------------- ------------- ---------- --------- ----------------- -------
Total equity at 31 December 2019 288.6 762.9 (17.6) 43.6 2,230.3 3,307.8
----------------------------------- ------------- ------------- ---------- --------- ----------------- -------
Taylor Wimpey plc
Condensed Consolidated Cash Flow Statement
For the half year ended 28 June 2020
Half year ended 28 Half year ended 30 June 2019 Year ended
June 2020 31 December 2019
GBP million Note (Reviewed) (Reviewed) (Audited)
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Operating activities:
(Loss)/profit on ordinary activities before
finance costs (24.3) 312.1 856.8
Adjustments for:
Depreciation and amortisation 7.8 6.1 13.5
Pension contributions in excess of
charge to the income statement (14.8) (25.1) (60.6)
Share-based payment charge 1.4 4.3 8.0
Net increase/(decrease) in provisions
excluding exceptional payments 8.7 (4.4) (6.2)
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Operating cash flows before movements in
working capital (21.2) 293.0 811.5
Increase in inventories (423.8) (239.9) (21.7)
Decrease/(increase) in receivables 13.9 (47.8) (12.7)
Decrease in payables (44.2) (21.3) (74.9)
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Cash generated by operations (475.3) (16.0) 702.2
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Payments relating to exceptional charges (7.8) (11.5) (36.8)
Income taxes paid (34.1) (71.5) (149.0)
Interest paid (6.5) (3.3) (6.4)
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Net cash from operating activities (523.7) (102.3) 510.0
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Investing activities:
Interest received 1.9 1.8 2.9
Dividends received from joint ventures - 0.4 7.4
Purchase of property, plant and equipment (2.1) (0.8) (7.2)
Purchase of software (2.5) (3.0) (5.4)
Amounts invested in joint ventures (23.7) (22.2) (6.3)
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Net cash used in investing activities (26.4) (23.8) (8.6)
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Financing activities:
Lease capital repayments (4.0) (4.1) (8.4)
Proceeds from the issue of own shares 12 510.1 - 0.1
Cash received on exercise of share options 0.3 2.6 5.4
Proceeds from borrowings 13.5 - -
Dividends paid - (124.2) (599.7)
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Net cash generated from/(used in) financing
activities 519.9 (125.7) (602.6)
------------------------------------------- ---- ------------------ ---------------------------- -----------------
Net decrease in cash and cash equivalents (30.2) (251.8) (101.2)
Cash and cash equivalents at beginning of
period 630.4 734.2 734.2
Effect of foreign exchange rate changes 1.6 (1.1) (2.6)
------------------------------------------- ---- ------------------ ---------------------------- =================
Cash and cash equivalents at end of period 8 601.8 481.3 630.4
------------------------------------------- ---- ------------------ ---------------------------- =================
Taylor Wimpey plc
Notes to the Condensed Consolidated Financial Statements
For the half year ended 28 June 2020
1. Accounting policies
Basis of preparation
The condensed consolidated financial statements have been
prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRSs) as
adopted by the European Union and the disclosure requirements of
the Listing Rules.
The condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting', as adopted by
the European Union. These should be read in conjunction with the
Group's annual financial statements for the year ended 31 December
2019, which have been prepared in accordance with applicable
IFRSs.
The information contained in this report does not constitute
statutory accounts as defined in section 434 of the Companies Act
2006. The condensed consolidated financial statements have been
reviewed but not audited. A copy of the statutory accounts for year
ended 31 December 2019 has been delivered to the Registrar of
Companies. The auditor reported on those accounts, their report was
unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under sections 498 (2) or
(3) of the Companies Act 2006.
The accounting policies and method of computations adopted in
the preparation of these condensed consolidated financial
statements are consistent with those followed in the preparation of
the Group's annual financial statements for the year ended 31
December 2019.
Going concern
During the period the Group took a number of mitigating actions,
in response to the COVID-19 pandemic, to tightly manage working
capital and liquidity, including pausing discretionary land spend
and cancelling the 2019 final dividend and 2020 special dividends.
The prudent step of fully drawing down the previously unutilised
GBP550 million revolving credit facility was also taken, which was
subsequently fully repaid in the period. In addition Her Majesty's
Treasury has confirmed that the Group was eligible in principle,
subject to documentation, as an issuer of the Covid Corporate
Financing Facility (CCFF).
In June 2020 the Group also completed a placing of shares that
raised GBP510.1 million, net of fees, that was undertaken to allow
the Group to pursue additional near term land acquisition
opportunities.
Updated Group forecasts have been prepared that reflect both the
actual experienced impact of the pandemic and estimates of future
impact based on the current Group operational plan. The forecasts
were subject to a range of sensitisation including severe but
plausible scenarios together with the likely effectiveness of
mitigating actions.
The assessment considered sensitivity analysis on a number of
realistically possible, but severe and prolonged, changes to
principal assumptions through to the end of December 2021. In
determining these the Group included macro-economic and industry
wide projections as well as matters specific to the Group. To
arrive at the sensitisation tests the Group has drawn on experience
gained managing the business through previous economic downturns
and stress tested the business against a number of scenarios
including:
- Volume - a reduction in volumes compared with 2019 of c.40%, particularly impacting on 2020
- Price - reduced selling prices by c.10% against current prices
In addition the Group considered what additional reductions to
volumes or sales prices would be required, before any further
mitigating actions were taken, to cause a potential breach in the
Group's financial covenants. Having performed the analysis the
Directors consider the likelihood of such scenarios to be remote
and that mitigating actions would be available should they be
required.
1. Accounting policies (continued)
The mitigating actions considered included a reduction in land
investment, a reduction in the level of production and work in
progress held and optimising the overhead base to ensure it aligned
with the scale of the operations through the cycle.
The Group's liquidity (defined as cash and undrawn committed
facilities) was GBP1,152 million at 28 June 2020 (excluding the
CCFF). Both drawn and undrawn facilities have maturities more than
one year after the current balance sheet date with EUR100 million
due in June 2023, EUR15 million due in December 2021 and GBP550
million maturing in February 2025. This is sufficient to absorb the
financial impact of each of the risks modelled in the stress and
sensitivity analysis.
Based on these forecasts it is considered that there are
sufficient resources available for the Group to continue for the
foreseeable future. As such the condensed consolidated financial
statements have been prepared on a going concern basis.
Estimates and judgements
The preparation of a condensed set of financial statements
requires management to make significant judgements and estimates.
Management have considered whether there are any such sources of
estimation or accounting judgements in preparing the condensed
financial statements. In identifying these areas management have
considered the size of the associated balance and the potential
likelihood of changes due to macro-economic factors such as the
United Kingdom leaving the European Union or the impact of
COVID-19.
In preparing these condensed consolidated financial statements,
the critical judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were principally the same as those applied to the Group's
consolidated financial statements for the year ended 31 December
2019.
2. Revenue
An analysis of the Group's continuing revenue is as follows:
Half year Half year Year ended
ended 28 ended 30 31 December
GBP million June 2020 June 2019 2019
-------------------- ---------- ---------- ------------
Private sales 657.8 1,498.1 3,798.3
Partnership housing 92.0 220.7 490.6
Land and other 4.8 13.9 52.4
-------------------- ---------- ---------- ------------
Total revenue 754.6 1,732.7 4,341.3
-------------------- ---------- ---------- ------------
3. Operating segments
IFRS 8 'Operating segments' requires information to be presented
in the same basis as it is reviewed internally. The Group operates
in two countries, being the United Kingdom and Spain.
The United Kingdom is split into three geographical divisions,
each managed by a Divisional Chair who sits on the Group Management
Team. In addition, there is a 'Corporate' operating segment which
includes the corporate functions, Major Developments and Strategic
Land.
Segment information about these businesses is presented
below:
Central London
Half year ended 28 June 2020 & South & South
GBP million North West East Corporate Spain Total
-------------------------------------- ------- -------- -------- --------- ------ ---------
Revenue
External sales 267.7 260.9 205.3 0.4 20.3 754.6
Result
(Loss)/profit on ordinary activities
before joint ventures, finance costs
and exceptional items (3.2) 22.3 (3.5) (33.4) 3.5 (14.3)
Share of results of joint ventures - - (1.7) (0.1) - (1.8)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Operating (loss)/profit (Note 17) (3.2) 22.3 (5.2) (33.5) 3.5 (16.1)
Exceptional items (Note 4) - - - (10.0) - (10.0)
-------------------------------------- ------- -------- -------- --------- ------ ---------
(Loss)/profit before finance costs (3.2) 22.3 (5.2) (43.5) 3.5 (26.1)
Net finance costs (13.7)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Loss before taxation (39.8)
Taxation 8.3
-------------------------------------- ------- -------- -------- --------- ------ ---------
Loss for the period (31.5)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Central London
As at 28 June 2020 & South & South
GBP million North West East Corporate Spain Total
-------------------------------------- ------- -------- -------- --------- ------ ---------
Assets and liabilities
Segment operating assets 1,406.3 1,428.9 1,494.0 279.5 178.5 4,787.2
Joint ventures 0.8 4.6 67.7 4.0 - 77.1
Segment operating liabilities (326.5) (495.0) (402.5) (316.6) (79.9) (1,620.5)
-------------------------------------- ------- -------- -------- --------- ------ -----------
Net operating assets/(liabilities) 1,080.6 938.5 1,159.2 (33.1) 98.6 3,243.8
Net current taxation (23.3)
Net deferred taxation 37.4
Accrued dividends -
Net cash 497.3
-------------------------------------- ------- -------- -------- --------- ------ -----------
Net assets 3,755.2
-------------------------------------- ------- -------- -------- --------- ------ -----------
3. Operating segments (continued)
Central London
Half year ended 30 June 2019 & South & South
GBP million North West East Corporate Spain Total
-------------------------------------- ------- -------- -------- --------- ------ ---------
Revenue
External sales 648.5 596.5 445.6 1.0 41.1 1,732.7
Result
Profit/(loss) on ordinary activities
before joint ventures, finance costs
and exceptional items 134.4 124.8 71.0 (26.2) 8.1 312.1
Share of results of joint ventures - - 0.2 (0.4) - (0.2)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Operating profit/(loss) (Note 17) 134.4 124.8 71.2 (26.6) 8.1 311.9
Exceptional items (Note 4) - - - - - -
-------------------------------------- ------- -------- -------- --------- ------ ---------
Profit/(loss) before finance costs 134.4 124.8 71.2 (26.6) 8.1 311.9
Net finance costs (12.1)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Profit before taxation 299.8
Taxation (57.8)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Profit for the period 242.0
-------------------------------------- ------- -------- -------- --------- ------ ---------
Central London
As at 30 June 2019 & South & South
GBP million North West East Corporate Spain Total
-------------------------------------- ------- -------- -------- --------- ------ ---------
Assets and liabilities
Segment operating assets 1,325.1 1,372.6 1,575.5 255.8 174.9 4,703.9
Joint ventures 1.6 4.0 61.7 2.6 - 69.9
Segment operating liabilities (388.6) (550.1) (455.4) (305.5) (92.5) (1,792.1)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Net operating assets/(liabilities) 938.1 826.5 1,181.8 (47.1) 82.4 2,981.7
Net current taxation (51.4)
Net deferred taxation 35.3
Accrued dividends (350.0)
Net cash 392.0
-------------------------------------- ------- -------- -------- --------- ------ ---------
Net assets 3,007.6
-------------------------------------- ------- -------- -------- --------- ------ ---------
Central London
Year ended 31 December 2019 & South & South
GBP million North West East Corporate Spain Total
-------------------------------------- ------- -------- -------- --------- ------ ---------
Revenue
External sales 1,547.9 1,447.3 1,214.4 11.3 120.4 4,341.3
Result
Profit/(loss) on ordinary activities
before joint ventures, finance costs
and exceptional items 320.0 316.2 227.3 (53.1) 32.1 842.5
Share of results of joint ventures - - 7.6 0.4 - 8.0
-------------------------------------- ------- -------- -------- --------- ------ ---------
Operating profit/(loss) (Note 17) 320.0 316.2 234.9 (52.7) 32.1 850.5
Exceptional items (Note 4) - - - 14.3 - 14.3
-------------------------------------- ------- -------- -------- --------- ------ ---------
Profit/(loss) before finance costs 320.0 316.2 234.9 (38.4) 32.1 864.8
Net finance costs (28.9)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Profit before taxation 835.9
Taxation (162.0)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Profit for the period 673.9
-------------------------------------- ------- -------- -------- --------- ------ ---------
Central London
As at 31 December 2019 & South & South
GBP million North West East Corporate Spain Total
-------------------------------------- ------- -------- -------- --------- ------ ---------
Assets and liabilities
Segment operating assets 1,310.1 1,345.4 1,372.6 270.9 161.7 4,460.7
Joint ventures 0.8 4.1 46.6 3.8 - 55.3
Segment operating liabilities (425.1) (538.1) (391.9) (277.1) (83.6) (1,715.8)
-------------------------------------- ------- -------- -------- --------- ------ ---------
Net operating assets/(liabilities) 885.8 811.4 1,027.3 (2.4) 78.1 2,800.2
Net current taxation (67.9)
Net deferred taxation 29.8
Net cash 545.7
-------------------------------------- ------- -------- -------- --------- ------ ---------
Net assets 3,307.8
-------------------------------------- ------- -------- -------- --------- ------ ---------
4. Net operating expenses and profit/(loss) on ordinary activities before finance costs
(Loss)/profit on ordinary activities before finance costs has
been arrived at after charging/(crediting):
Half year Half year Year ended
ended 28 ended 30 31 December
GBP million June 2020 June 2019 2019
------------------------ ---------- ---------- ------------
Administration expenses 103.3 103.6 211.7
Other expense 3.9 0.8 4.3
Other income (1.9) (6.9) (14.4)
Exceptional items 10.0 - (14.3)
------------------------ ---------- ---------- ------------
Other income includes profits on the sale of property, plant and
equipment, revaluation of certain shared equity mortgage
receivables, pre-acquisition and abortive costs, and profit/loss on
the sale of part exchange properties. In April 2020 the Group took
the decision to utilise the Government's Coronavirus Job Retention
Scheme. As of 1 June 2020, all employees had returned from furlough
and the Group stopped its use of the scheme. As announced on 17
June 2020 the Group was returning the funds to Government with
repayment occurring on 13 July 2020 with a creditor recognised at
the end of the period.
Half year Half year Year ended
Exceptional items: ended 28 ended 30 31 December
GBP million June 2020 June 2019 2019
------------------------------------------------------- ---------- ---------- ------------
Provision in relation to Aluminium Composite Materials
cladding 10.0 - -
Net Pension Increase Exchange credit - - (14.3)
------------------------------------------------------- ---------- ---------- ------------
10.0 - (14.3)
------------------------------------------------------- ---------- ---------- ------------
Tax (credit)/charge (1.7) - 2.7
------------------------------------------------------- ---------- ---------- ------------
Net exceptional items charged to the income statement 8.3 - (11.6)
------------------------------------------------------- ---------- ---------- ------------
Aluminium Composite Materials (ACM) cladding
Following the tragic fire at Grenfell Tower, the Group conducted
a detailed review into all legacy and current buildings ACM
cladding and worked with building owners, management companies, and
the Fire Service to implement Government advice on interim
mitigation measures, where applicable. Whilst each situation is
different, and this is an exceptionally complex issue, the Group
has in a number of cases, having regard to all of the relevant
facts and circumstances, agreed to support our customers both
financially and practically with removal and replacement of ACM
cladding, even though the buildings concerned met the requirements
of building regulations at the time construction was formally
approved. This decision was taken for buildings recently
constructed by the Group because management believe that it is
morally right, not because it is legally required. In the first
half of 2020 the provision was increased by GBP10 million to
reflect the latest cost estimates of the work to be performed.
Pension Increase Exchange (PIE)
During 2019, the Group initiated a Pension Increase Exchange
exercise which enables pension scheme members to elect to exchange
future pension increases on part of their pensions for a one-off
increase in pension. The PIE exercise consisted of two stages - the
option to select the exchange at retirement for members who have
not yet retired and a bulk exercise for members already drawing a
pension. The credit arising from the implementation of the PIE was
considered a past service credit and recognised through the income
statement in accordance with IAS 19.
5. Finance income and finance costs
Half year Half year
ended ended
Finance income: 28 30 Year ended
June June 31 December
GBP million 2020 2019 2019
-------------------- --------- --------- ------------
Interest receivable 1.9 1.8 2.9
-------------------- --------- --------- ------------
Half year Half year
ended ended
Finance costs: 28 30 Year ended
June June 31 December
GBP million 2020 2019 2019
-------------------------------------------------- --------- --------- ------------
Interest on overdrafts, bank and other loans 5.7 2.4 5.5
Foreign exchange movements (0.6) 0.5 1.1
-------------------------------------------------- --------- --------- ------------
5.1 2.9 6.6
Unwinding of discount on land creditors and other
items 9.5 9.0 21.5
Interest on lease liabilities 0.2 0.2 0.5
Net interest on pension liability 0.8 1.8 3.2
-------------------------------------------------- --------- --------- ------------
15.6 13.9 31.8
-------------------------------------------------- --------- --------- ------------
6. Taxation
Tax (charged)/credited in the income statement is analysed as
follows:
Half year Half year
ended ended
28 30 Year ended
June June 31 December
GBP million 2020 2019 2019
------------ ------------------------------------- --------- --------- ------------
Current
tax:
UK: Current year 10.8 (51.0) (138.1)
Adjustment in respect of prior years - - (5.2)
Overseas: Current year (0.4) (1.4) (5.2)
Adjustment in respect of prior years (0.1) (0.7) (0.6)
-------------------------------------------------- --------- --------- ------------
10.3 (53.1) (149.1)
-------------------------------------------------- --------- --------- ------------
Deferred
tax:
UK: Current year (2.0) (3.9) (10.8)
Adjustment in respect of prior years - (0.8) 0.5
Overseas: Current year - - (1.8)
Adjustment in respect of prior years - - (0.8)
-------------------------------------------------- --------- --------- ------------
(2.0) (4.7) (12.9)
-------------------------------------------------- --------- --------- ------------
8.3 (57.8) (162.0)
-------------------------------------------------- --------- --------- ------------
The effective tax rate for the period is 20.9% (30 June 2019
effective tax rate: 19.3%) and includes a GBP1.3 million credit (30
June 2019: GBPnil) arising from the remeasurement of the Group's UK
deferred tax assets at 19% following the changes to the corporation
tax rates enacted by the UK Government.
Closing deferred tax on UK temporary differences has been
calculated at the rates expected to apply for the period when the
asset is realised, or the liability is settled. Accordingly, the UK
temporary differences have been calculated at a rate of 19% (30
June 2019: between 19% and 17%).
7. (Loss)/earnings per share
Half year Half year
ended 28 ended 30 Year ended
June 2020 June 2019 31 December 2019
--------------------------------------------------------------------------- ---------- ---------- -----------------
Basic (loss)/earnings per share (1.0)p 7.4p 20.6p
Diluted (loss)/earnings per share (1.0)p 7.4p 20.6p
Adjusted basic (loss)/earnings per share (0.7)p 7.4p 20.3p
Adjusted diluted (loss)/earnings per share (0.7)p 7.4p 20.2p
Weighted average number of shares for basic (loss)/earnings per share -
million 3,305.1 3,267.0 3,268.2
Weighted average number of shares for diluted (loss)/earnings per share -
million 3,305.1 3,275.8 3,276.2
--------------------------------------------------------------------------- ---------- ---------- -----------------
Adjusted basic and adjusted diluted (loss)/earnings per share,
which exclude the impact of exceptional items and the associated
net tax charges, are shown to provide clarity on the underlying
performance of the Group. In accordance with IAS 33, the weighted
average number of shares for diluted (loss)/earnings per share are
without reference to adjustments in respect of outstanding shares
when the impact would be anti-dilutive.
A reconciliation from (loss)/profit from operations attributable
to equity shareholders used for basic and diluted (loss)/earnings
per share to that used for adjusted (loss)/earnings per share is
shown below:
Half year Half year
ended 28 ended 30 Year ended
GBP million June 2020 June 2019 31 December 2019
--------------------------------------------------------------------------- ---------- ---------- -----------------
Earnings for basic and diluted (loss)/earnings per share (31.5) 242.0 673.9
Exceptional items 10.0 - (14.3)
Tax on exceptional items (1.7) - 2.7
--------------------------------------------------------------------------- ---------- ---------- -----------------
Earnings for adjusted basic and adjusted diluted (loss)/earnings per share (23.2) 242.0 662.3
--------------------------------------------------------------------------- ---------- ---------- -----------------
8. Notes to the cash flow statement
Cash and cash equivalents comprise cash at bank and other short
term highly liquid investments with an original maturity of three
months or less.
Movement in net cash:
Cash and cash equivalents Bank and Total
GBP million other loans net cash
------------------ ------------------------- ------------ ---------
At 1 January 2020 630.4 (84.7) 545.7
Net cash flow (30.2) (13.5) (43.7)
Foreign exchange 1.6 (6.3) (4.7)
------------------ ------------------------- ------------ ---------
At 28 June 2020 601.8 (104.5) 497.3
------------------ ------------------------- ------------ ---------
Cash and cash equivalents Bank and Total
GBP million other loans net cash
------------------ ------------------------- ------------ ---------
At 1 January 2019 734.2 (90.1) 644.1
Net cash flow (251.8) - (251.8)
Foreign exchange (1.1) 0.8 (0.3)
------------------ ------------------------- ------------ ---------
At 30 June 2019 481.3 (89.3) 392.0
------------------ ------------------------- ------------ ---------
Cash and cash equivalents Bank and Total
GBP million other loans net cash
-------------------- ------------------------- ------------ ---------
At 1 January 2019 734.2 (90.1) 644.1
Net cash flow (101.2) - (101.2)
Foreign exchange (2.6) 5.4 2.8
-------------------- ------------------------- ------------ ---------
At 31 December 2019 630.4 (84.7) 545.7
-------------------- ------------------------- ------------ ---------
The committed borrowing facilities are currently GBP654.5
million with an average maturity of 4.3 years.
9. Pensions
The 2016 triennial valuation for the Taylor Wimpey Pension
Scheme was completed in February 2018. This committed the Group to
cash contributions of GBP40.0 million per annum plus GBP2.0 million
towards administration costs, together with the GBP5.1 million
distribution from the Pension Funding Partnership. However, the
GBP40.0 million of cash contributions may be paused should the
Scheme become fully funded on a Technical Provisions basis during
the period.
At 28 June 2020, the Scheme was 92% funded and as such cash
contributions will continue under the funding plan. At 28 June 2020
the IAS19 deficit was GBP80.1 million (GBP100.5 million surplus at
31 December 2019).
An IFRIC 14 deficit has been recognised, which represents the
present value of future contributions under the funding plan
together with distributions from the Pension Funding Partnership.
As the Scheme is less than 96% funded, the cash commitments under
the funding plan are included in the calculation of the IFRIC 14
deficit which results in a deficit recognised on the balance sheet
of GBP114.2 million (31 December 2019: GBP84.5 million). In
addition there is as a post-retirement healthcare liability of
GBP0.5 million (31 December 2019: GBP0.5 million).
10. Financial assets and liabilities
Carrying amount Fair value
----------------------------- -----------------------------
28 June 30 June 31 December 28 June 30 June 31 December
GBP million 2020 2019 2019 2020 2019 2019
---------------------------- ------- ------- ----------- ------- ------- -----------
Financial assets
Cash and cash equivalents a 601.8 481.3 630.4 601.8 481.3 630.4
Land receivables a 7.5 7.7 12.8 7.5 7.7 12.8
Trade and other receivables a 106.2 141.5 113.5 106.2 141.5 113.5
Mortgage receivables b 30.6 40.3 34.0 30.6 40.3 34.0
---------------------------- ------- ------- ----------- ------- ------- -----------
Financial liabilities
Bank and other loans c 104.5 89.3 84.7 104.3 91.0 85.8
Land creditors a 630.6 717.7 729.2 630.6 717.7 729.2
Trade and other payables a 543.9 667.4 628.2 543.9 667.4 628.2
Lease liabilities a 24.8 26.0 27.9 24.8 26.0 27.9
---------------------------- ------- ------- ----------- ------- ------- -----------
(a) The Directors consider the carrying amounts of financial
assets and financial liabilities recorded at amortised cost in the
condensed consolidated financial statements approximate their fair
values.
(b) Mortgage receivables relate to sales incentives including
shared equity loans and are measured at fair value through profit
or loss. The fair value is established based on a publicly
available national house price index, being significant other
observable inputs (level 2).
(c) The fair value of the EUR100 million fixed rate loan notes
has been determined by reference to external interest rates and the
Directors' assessment of the margin for credit risk (level 2).
Land receivables and trade and other receivables are included in
the balance sheet as trade and other receivables for current and
non-current amounts and include GBP41.7 million (31 December 2019:
GBP44.4 million) of non-financial assets.
Current and non-current trade and other payables includes
non-financial liabilities of GBP176.9 million (31 December 2019:
GBP117.1 million).
The Group has designated a financial liability in the sum of
EUR79.0 million (31 December 2019: EUR79.0 million) as a net
investment hedge. The Group had no financial instruments with fair
values that are determined by reference to significant unobservable
inputs (level 3), nor have there been any transfers of assets or
liabilities between levels of the fair value hierarchy. There are
no non-recurring fair value measurements.
11. Provisions
ACM cladding Leasehold
GBP million provision provision Other Total
------------------------ ------------ ---------- ----- ------
At 31 December 2019 23.7 72.2 32.5 128.4
Additions in the period 10.0 - 2.3 12.3
Utilised (1.1) (6.7) (2.5) (10.3)
Released - - (1.0) (1.0)
Other movements - - 0.2 0.2
------------------------ ------------ ---------- ----- ------
At 28 June 2020 32.6 65.5 31.5 129.6
------------------------ ------------ ---------- ----- ------
28 June 30 June 31 December
GBP million 2020 2019 2019
------------ ------- ------- -----------
Current 72.3 67.4 72.7
Non-current 57.3 77.8 55.7
------------ ------- ------- -----------
129.6 145.2 128.4
------------ ------- ------- -----------
In 2018 the Group established an exceptional provision for the
cost of replacing Aluminium Composite Material (ACM) on a small
number of legacy developments, which was increased in the period to
reflect the latest estimate of costs to complete the planned works.
The majority of the provision is expected to be utilised within two
years.
In 2017 the Group launched an assistance scheme to help certain
customers restructure their ground rent agreements with their
freeholder and established an associated provision of GBP130.0
million to fund this. The amounts and timing of the outflows depend
largely on the number and rate of eligible applicants to the scheme
and ongoing discussion with freeholders. The Group expects the
scheme will run for several years and anticipates approximately
GBP40.0 million of the provision will be utilised within the next
twelve months.
Other provisions consist of a remedial work provision covering
various obligations on a limited number of sites across the Group.
Other provisions also includes amounts for legal claims and other
contract-related costs associated with various matters arising
across the Group, the majority of which are anticipated to be
settled within a three year period; however, there is some
uncertainty regarding the timing of these outflows due to the
nature of the claims and the length of time it can take to reach
settlement.
12. Share capital
In June 2020 the Group issued 360,265,931 ordinary shares of 1p
at a price of 145p to raise total net proceeds of GBP510.1 million
after expenses. 355,000,000 of these shares were placed via a cash
box structure (the "Placing") in which the cash box entity issued
redeemable preference shares in consideration for the receipt of
the net cash proceeds arising from the placement of those shares.
Taylor Wimpey plc ordinary shares were issued in consideration for
the transfer of the redeemable preference shares, that it did not
already own, of the cash box entity. It was therefore determined
that the placing of those shares qualified for merger relief under
section 612 of the Companies Act 2006 such that the excess of the
value of the acquired shares in the cash box entity over the
nominal value of the ordinary shares issued by Taylor Wimpey plc
was credited to Other Reserves. The remainder of the shares issued,
5,265,931, were issued via a Retail Offer open to employees and
other retail investors and a Directors Subscription. The Placing
was performed to allow the Group to pursue additional near term
land acquisition opportunities.
The Placing, Retail and Subscription shares placed rank pari
passu in all respects with the existing ordinary shares of the
Company, including, without limitation, the right to receive all
dividends and other distributions declared, made or paid after the
date of issue.
13. Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed within the financial statements or related notes.
14. Dividends
Half year Year ended
Half year ended 31 December
ended 30 2019
28 June June
GBP million 2020 2019
===================== ========= ========= ============
Approved and paid - 124.2 599.7
Approved and accrued - 350.0 -
Approved - 125.0 -
Proposed - - 125.0
===================== ========= ========= ============
In order to conserve cash and increase flexibility the Group
took the decision to cancel the 2020 final dividend of 3.80 pence
per share (c.GBP125 million) that was due to be paid on 15 May 2020
and the planned special dividend payment of 10.99 pence per share
(c.GBP360 million) which was due to be paid on 10 July 2020. The
Group expects to resume the payment of an ordinary dividend in 2021
and will review the special dividend in 2021 for payment in
2022.
15. Share based payments
The Group recognised a share based payment expense of GBP2.4
million to 28 June 2020 (30 June 2019: GBP4.9 million), which was
composed of GBP1.4 million in relation to equity settled schemes
and GBP1.0 million in relation to cash settled elements.
16. Seasonality
Weekly sales rates in some of the Group's key markets
historically experience significant seasonal variation, with the
highest levels of reservations usually occurring in the spring and
autumn in the UK. As such, economic weakness which affects these
peak selling seasons can have a disproportionate impact on the
results for the year.
This pattern of reservations tends to result in higher levels of
home completions towards the end of the financial year. As a
result, the Group's work in progress and debt profile exhibits
peaks and troughs over the course of the financial year.
With the impact of COVID-19 these seasonal variations have been
disrupted and the current period may not be reflective of prior
period variations.
17. Alternative performance measures
The Group uses a number of Alternative Performance Measures
(APMs) which are not defined within IFRS. The Directors use these
measures in order to assess the underlying operational performance
of the Group and, as such, these measures should be considered
alongside the IFRS measures. The following APMs are referred to
throughout the half year results.
Profit/(loss) before taxation and exceptional items and
profit/(loss) for the period before exceptional items
The Directors consider the removal of exceptional items from the
reported results provides more clarity on the performance of the
Group. They are reconciled to profit/(loss) before taxation and
profit/(loss) for the period respectively, on the face of the
Consolidated Income Statement.
17. Alternative performance measures (continued)
Operating profit/(loss) and operating margin
Throughout the report operating profit/(loss) is used as one of
the main measures of performance. Operating profit/(loss) is
defined as profit/(loss) on ordinary activities before net finance
costs, exceptional items and tax, after share of results of joint
ventures. The Directors consider this to be an important measure of
underlying performance of the Group. Operating margin is calculated
as operating profit/(loss) divided by total revenue. The Directors
consider this to be a metric which reflects the underlying
performance of the business.
Half year Half year
ended ended
28 30 Year ended
June June 31 December
2020 2019 2019
---------------------------------------------------- --------- --------- ------------
(Loss)/profit on ordinary activities before finance
costs (GBPm) (24.3) 312.1 856.8
Adjusted for:
Share of results of joint ventures (GBPm) (1.8) (0.2) 8.0
Exceptional items (GBPm) 10.0 - (14.3)
---------------------------------------------------- --------- --------- ------------
Operating (loss)/profit (GBPm) (16.1) 311.9 850.5
==================================================== ========= ========= ============
Revenue (GBPm) 754.6 1,732.7 4,341.3
==================================================== ========= ========= ============
Operating margin (2.1)% 18.0% 19.6%
==================================================== ========= ========= ============
Rolling 12-month operating profit* (GBPm) 522.5 847.8 850.5
==================================================== ========= ========= ============
* Operating profit for the 6-month period ended 31 December
2018: Profit before interest and tax: GBP512.4m; Share of results
of joint ventures: GBP7.4m; Exceptional items: GBP(16.1)m.
Net operating assets
Net operating assets is defined as basic net assets less net
cash, excluding net taxation balances and accrued dividends.
Average net operating assets is the average of the opening and
closing net operating assets of the 12-month period. With return on
net operating assets, the Directors consider this to be an
important measure of the underlying operating efficiency and
performance of the Group .
28 June 30 June 31 December 31 December 1 July
GBPmillion 2020 2019 2019 2018 2018
--------------------------------- -------- --------- ------------ ------------ ---------
Basic net assets (GBPm) 3,755.2 3,007.6 3,307.8 3,226.8 2,950.6
Adjusted for:
Cash (GBPm) (601.8) (481.3) (630.4) (734.2) (613.6)
Borrowings (GBPm) 104.5 89.3 84.7 90.1 88.5
Net taxation (GBPm) (14.1) 16.1 38.1 29.2 16.9
Accrued dividends (GBPm) - 350.0 - - 340.0
--------------------------------- -------- --------- ------------ ------------ ---------
Net operating assets (GBPm) 3,243.8 2,981.7 2,800.2 2,611.9 2,782.4
--------------------------------- -------- --------- ------------ ------------ ---------
Average basic net assets (GBPm) 3,381.4 2,979.1 3,267.3
--------------------------------- -------- --------- ------------ ------------ ---------
Average net operating assets
(GBPm) 3,112.8 2,882.1 2,706.1
--------------------------------- -------- --------- ------------ ------------ ---------
Return on net operating assets
Return on net operating assets is defined as rolling 12-month
operating profit divided by average net operating assets. The
Directors consider this to be an important measure of the
underlying operating efficiency and performance of the Group.
31 December
28 June 2020 30 June 2019 2019
----------------------------------------- ------------ ------------ -----------
Rolling 12-month operating profit (GBPm) 522.5 847.8 850.5
Average net operating assets (GBPm) 3,112.8 2,882.1 2,706.1
----------------------------------------- ------------ ------------ -----------
Return on net operating assets 16.8% 29.4% 31.4%
========================================= ============ ============ ===========
17. Alternative performance measures (continued)
Net operating asset turn
This is defined as total revenue divided by the average of
opening and closing net operating assets, based on a rolling
12-month period. The Directors consider this to be good indicator
of how efficiently the Group is utilising its assets to generate
value for the shareholders.
31 December
28 June 2020 30 June 2019 2019
------------------------------------ ------------ ------------ -----------
Rolling 12-month revenue* (GBPm) 3,363.2 4,094.9 4,341.3
Average net operating assets (GBPm) 3,112.8 2,882.1 2,706.1
------------------------------------ ------------ ------------ -----------
Net operating asset turn 1.08 1.42 1.60
==================================== ============ ============ ===========
* Revenue for the 6-month period ended 31 December 2018:
GBP2,362.2 million
Tangible net assets per share
This is calculated as net assets before any accrued dividends
excluding goodwill and intangible assets divided by the number of
ordinary shares in issue at the end of the period. The Directors
consider this to be a good measure of the value intrinsic within
each ordinary share.
31 December
28 June 2020 30 June 2019 2019
-------------------------------------- ------------ ------------ -----------
Basic net assets (GBPm) 3,755.2 3,007.6 3,307.8
Adjusted for:
Accrued dividends (GBPm) - 350.0 -
Intangible assets (GBPm) (8.1) (5.6) (7.0)
-------------------------------------- ------------ ------------ -----------
Tangible net assets (GBPm) 3,747.1 3,352.0 3,300.8
Ordinary shares in issue (millions) 3,644.4 3,279.8 3,283.1
====================================== ============ ============ ===========
Tangible net assets per share (pence) 102.8 102.2 100.5
====================================== ============ ============ ===========
Net cash
Net cash is defined as total cash less total financing. This is
considered by the Directors to be the best indicator of the
financing position of the Group and is reconciled in Note 8.
Cash conversion
This is defined as cash generated by operations divided by
operating profit, based on a rolling 12-month period. The Directors
consider this measure to be a good indication of how efficiently
the Group is turning profit into cash.
31 December
28 June 2020 30 June 2019 2019
----------------------------------------------- ------------ ------------ -----------
Rolling 12-month cash generated by operations*
(GBPm) 242.9 604.4 702.2
Rolling 12-month operating profit (GBPm) 522.5 847.8 850.5
----------------------------------------------- ------------ ------------ -----------
Cash conversion 46.5% 71.3% 82.6%
=============================================== ============ ============ ===========
* Cash generated by operations for the 6-month period ended 31
December 2018: GBP620.4m.
Adjusted gearing
This is defined as adjusted net debt divided by basic net
assets. The Directors consider this to be a more representative
measure of the Group's gearing levels. Adjusted net debt is defined
as net cash less land creditors.
31 December
28 June 2020 30 June 2019 2019
------------------------- ------------ ------------ -----------
Cash (GBPm) 601.8 481.3 630.4
Loans (GBPm) (104.5) (89.3) (84.7)
------------------------- ------------ ------------ -----------
Net cash (GBPm) 497.3 392.0 545.7
Land creditors (GBPm) (630.6) (717.7) (729.2)
------------------------- ------------ ------------ -----------
Adjusted net debt (GBPm) (133.3) (325.7) (183.5)
------------------------- ------------ ------------ -----------
Basic net assets (GBPm) 3,755.2 3,007.6 3,307.8
------------------------- ------------ ------------ -----------
Adjusted gearing 3.5% 10.8% 5.5%
========================= ============ ============ ===========
17. Alternative performance measures (continued)
Adjusted basic earnings per share
This is calculated as earnings attributed to the shareholders,
excluding exceptional items and tax on exceptional items, divided
by the weighted average number of shares. The Directors consider
this provides an important measure of the underlying earnings
capacity of the Group. Note 7 shows a reconciliation from basic
earnings per share to adjusted basic earnings per share.
18. Post balance sheet events
There were no material subsequent events affecting the Group
between 28 June 2020 and the date of this announcement that need to
be disclosed.
Taylor Wimpey plc
Statement of Directors' Responsibility
For the half year ended 28 June 2020
The Directors confirm that, to the best of their knowledge,
these condensed consolidated interim financial statements have been
prepared in accordance with IAS 34 'Interim Financial Reporting' as
adopted by the European Union.
The interim management report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure
and Transparency Rules, namely:
-- an indication of important events that have occurred during
the first half year of the financial year and their impact on the
condensed set of financial statements;
-- a description of the principal risks and uncertainties for
the remaining six months of the financial year; and
-- material related party transactions in the first half year of
the financial year and any material changes in the related party
transactions described in the last Annual Report.
By order of the Board
Irene Dorner, Chair
Pete Redfern, Chief Executive
28 July 2020
INDEPENT REVIEW REPORT TO TAYLOR WIMPEY PLC
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 28 June 2020 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated statement of changes in equity, the
condensed consolidated cash flow statement and related Notes 1 to
18. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in Note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 28
June 2020 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure Guidance and Transparency Rules
of the United Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
28 July 2020
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BCGDRXUDDGGI
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July 29, 2020 02:00 ET (06:00 GMT)
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