RNS Number : 5572Y
Taylor Wimpey PLC
17 January 2022
17 January 2022
Taylor Wimpey plc
Trading statement for the year ended 31 December 2021
Taylor Wimpey is issuing the following update on trading ahead
of its full year results for the year ended 31 December 2021, which
will be announced on 3 March 2022.
Pete Redfern, Chief Executive, commented:
"We have delivered an excellent performance in 2021 and expect
to report full year results in line with our expectations. Market
conditions remain supportive and we continue to see strong demand
for our homes. Our strategy of optimising sales rates, prices and
operational excellence and efficiencies is enabling us to drive a
significant improvement in operating margin (*) .
Our proactive landbuying strategy during the pandemic supported
accelerated land investments at attractive margins, providing a
sector-leading landbank that will support future, significant
We are also very proud of our strong stakeholder commitments and
continue to integrate our ambitious environmental strategy across
Looking ahead, we are well placed to deliver against our
targets. The outlook is positive and Taylor Wimpey is particularly
well positioned. We maintain a sharp focus on delivering
sustainable growth, strong profitability, and increased cash
returns for shareholders over the long term."
Throughout 2021 we experienced strong demand for our homes
underpinned by continued low interest rates and good mortgage
availability. The business performed very well in the year and we
will report 2021 full year results in line with expectations(1) ,
with significant improvement in operating margin, as we focused on
optimising sales prices, alongside increased volume, driving strong
growth in operating profit (*) .
Total UK home completions (including joint ventures) increased
by 47% to 14,087 in 2021 (2020: 9,609), which included 2,501
affordable homes (2020: 1,904) equating to 18% of total completions
(2020: 20%). Our net private reservation rate for 2021 was 0.91
homes per outlet per week (2020: 0.76). Cancellation rates for the
full year were at normal levels of 14% (2020: 20%). Average selling
prices on private completions increased by 3% to GBP332k (2020:
GBP323k), with the overall average selling price increasing to
GBP300k (2020: GBP288k). We ended the year with an excellent order
book valued at GBP2,550 million (31 December 2020: GBP2,684
million), excluding joint ventures, which represents 10,009 homes
(31 December 2020: 10,685 homes).
With demand for our homes remaining strong, we closed sales
outlets ahead of schedule and traded from an average of 225 outlets
in 2021 (2020: 240). We enter 2022 with 228 outlets (31 December
2020: 239) and remain confident of growing our outlets meaningfully
from H2 2022.
During 2021, house price inflation fully offset build cost
inflation amidst wider industry pressure on the cost and
availability of certain materials. Our national scale and strong
partner relationships and agreements enabled us to effectively
manage these pressures.
As at 31 December 2021, our short term landbank stood at c.85k
plots (2020: c.77k plots). Our strategic land pipeline was c.145k
potential plots (2020: c.139k plots).
Following our equity raise in June 2020, which enabled
accelerated land buying at attractive margins, we have added c.29k
new plots to the short term landbank over the last 18 months,
including converting c.9k plots from our strategic land pipeline.
We have also added c.16k potential new plots to our strategic
pipeline. These sites are across all regions of our business and a
healthy balance of large and small sites.
Spain current trading
During 2021, the anticipated gradual easing of travel
restrictions, allowing prospective second home buyers to travel to
Spain, has resulted in an increased level of demand, particularly
in the second half of the year. We completed 215 homes in 2021
(2020: 190) at an average selling price of EUR417k (2020: EUR375k).
The total order book as at 31 December 2021 stood at 324 homes (31
December 2020: 126 homes).
Group cash position
We ended the year with strong net cash(++) of GBP837.0 million
(31 December 2020: GBP719.4 million net cash), ahead of
expectations due to the timing of land spend .
Excess cash returns
As previously stated, our intention remains to return to
shareholders all cash generated by the business that is in excess
of that required to fund land investment, working capital, and
other cash requirements of the business, and once the ordinary
dividend has been met. The Board remains committed to such returns
and will announce the level of excess cash return in respect of
2021 with the company's full year results on 3 March 2022. It is
the Board's current intention to return this cash by way of a share
buyback, however the final method of return will be determined at
the time of the full year results in light of prevailing
Delivering long term value for all stakeholders
We have retained our focus on build quality and are the highest
rated major housebuilder in the independently measured 2021 NHBC
Construction Quality Review (CQR) with an average score of 4.67 out
of 6 (2020: 4.45 out of 6). We continue to prioritise customer
service and we expect to remain a five-star builder in the upcoming
Home Builders Federation survey for 2021.
Our employees remain a key differentiator and we continue to
benefit from a highly skilled, talented and engaged workforce, as
reflected in our most recent employee survey with an overall
employee engagement score of over 90%. During 2021 we were also
accredited by the Living Wage Foundation, recognising the work we
have done to encourage our partners to ensure contractors not
directly on our payroll also receive the Living Wage.
We continue to integrate our ambitious environmental strategy
rolled out in early 2021 which includes science-based carbon
reduction targets, independently approved by the Science Based
Target initiative (SBTi), as well as targets for biodiversity and
waste reduction. We achieved a Gold Award in the 2021
NextGeneration Benchmark (2020: Silver).
Fire safety improvement works
The safety of our customers is of paramount importance. In March
2021, we announced that we would cover the costs to bring all
Taylor Wimpey apartment buildings built within the last 20 years,
irrespective of height or whether we retain a legal interest, in
line with current EWS1 guidance, covering cladding and the whole of
the external wall systems including balconies. We have identified
all Taylor Wimpey buildings both above and below 18 metres that may
require works and are in active dialogue with building owners to
undertake these, with work underway on many. We believe that the
provision we have taken remains a reasonable estimate of these
costs. We continue to believe this is an industry wide issue that
needs an industry wide solution and will continue to work with
Government to try to help resolve these wider issues.
We start 2022 in a very strong position with an excellent order
book and are 47% forward sold for 2022 (2021: 54%). Despite wider
economic uncertainty, forward indicators continue to show good
underlying demand for our homes and pricing remains positive.
We are making good headway progressing land through the planning
system to deliver outlet-led growth. Subject to planning, we remain
well placed to meaningfully grow our outlets from H2 2022 to
underpin a significant step up in volume from 2023, as previously
With a strong focus on optimising sales prices, cost, process
simplification and other core value drivers, we are confident in
achieving our primary performance target to return the business to
a 21-22% operating margin.
We continue to run the business in the long term interests of
all of our stakeholders, maximising long term shareholder value
whilst continuing to deliver quality homes and the highest level of
customer service. With an excellent landbank and a focus on strong
operational execution, the Board is confident of delivering growth
and sustained shareholder value, while meeting broader stakeholder
expectations in the years ahead.
* Operating profit is defined as profit 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 divided by
(++) Net cash is defined as total cash less total
(1) Guidance is for 2021 full year Group operating profit
including joint ventures of c.GBP820 million, with UK completions
(excluding joint ventures) expected to be towards the upper end of
our guidance range of 13,200 to 14,000.
For further information please contact:
Taylor Wimpey plc Tel: +44 (0) 7826 874461
Pete Redfern, Chief Executive
Chris Carney, Group Finance Director
Debbie Archibald, Investor Relations
Andrew McGeary, Investor Relations
Notes to editors:
Taylor Wimpey plc is a customer-focused homebuilder, operating
at a local level from 23 regional businesses across the UK. We also
have operations in Spain.
For further information, please visit the Group's website:
Follow us on Twitter via @TaylorWimpeyplc
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(END) Dow Jones Newswires
January 17, 2022 02:00 ET (07:00 GMT)
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