TIDMTW.
RNS Number : 6028M
Taylor Wimpey PLC
13 January 2023
13 January 2023
Taylor Wimpey plc
Trading statement for the year ended 31 December 2022
Taylor Wimpey is issuing the following update on trading ahead
of its full year results for the year ended 31 December 2022, which
will be announced on 2 March 2023.
Overview
Jennie Daly, CEO, commented:
"The business performed well in 2022, as our tight operational
controls and price discipline led to an improved operating margin
(*) . Despite the economic and political backdrop through the
second half, I am pleased that we expect to report full year
operating profit * in line with expectations(1) . "
"As previously reported, we have acted quickly and decisively to
address changing market conditions and continue our efforts to
maximise efficiency."
"Taylor Wimpey is a strong and agile business benefitting from a
high quality and well located landbank, a strong balance sheet and
unwavering focus on operational execution as we continue to manage
the business with discipline to deliver value for all our
stakeholders. Despite near term uncertainty we remain confident
that the medium to long term fundamentals of our business remain
highly attractive."
2022 performance
The business performed well in 2022 due to our tight operational
controls and selling price discipline leading to an improved
operating margin. As guided in November, Group completions for the
full year were broadly in line with the prior year and we expect to
report 2022 full year operating profit in line with
expectations.
Total Group completions (including joint ventures) were 14,154
(2021: 14,302). UK home completions (including joint ventures) were
13,773 (2021: 14,087), which included 2,920 affordable homes (2021:
2,501) equating to 21% of total completions (2021: 18%). Our net
private reservation rate for 2022 was 0.68 homes per outlet per
week (2021: 0.91). The cancellation rate for the full year was 18%
(2021: 14%). In the second half of 2022 our net private reservation
rate was 0.48 homes per outlet per week (2021: 0.85) and the
cancellation rate was 23% (2021: 14%).
UK average selling prices on private completions increased by 6%
to GBP352k (2021: GBP332k) with the overall average selling price
increasing by 4% to GBP313k (2021: GBP300k). We ended the year with
an order book valued at GBP1,941 million (31 December 2021:
GBP2,550 million), excluding joint ventures, which represents 7,499
homes (31 December 2021: 10,009 homes).
In the UK, we traded from an average of 232 outlets in 2022
(2021: 225). As guided, we increased our total number of outlets to
end the year with 259 (31 December 2021: 228).
Land and planning
As at 31 December 2022, our short term landbank stood at c.83k
plots (2021: c.85k). Our strategic land pipeline was c.144k
potential plots (2021: c.145k potential plots).
With a strong land position, we continued to be highly selective
in our landbuying in the second half of 2022 and, as a result, 2022
approvals were c.7k plots, a similar level to half year 2022.
The planning environment continues to be challenging with delays
and resource pressures impacting housing land supply. Proposed
amendments to the National Planning Policy Framework announced by
the Government in December 2022 include positive measures to
support improved quality of design and placemaking. However, other
changes including amendments to the approach to housing numbers
locally, a relaxation of the soundness test for plan-making and the
removal of the need for Planning Authorities to maintain a
five-year supply of deliverable housing sites could result in
further delays and a shortfall in the supply of sites. In addition,
the transitional arrangements proposed are likely to result in a
meaningful hiatus in plan-making which is likely to further
constrain the availability of land for housing. We welcome proposed
amendments to the Levelling Up and Regeneration Bill to help
address Nutrient Neutrality constraints that affect more than 74
local authorities in England.
Spain current trading
The business performed well with 381 homes completed in 2022
(2021: 215) at an average selling price of EUR383k (2021: EUR417k),
with the movement in pricing reflecting mix as we completed a
greater proportion of properties in the Alicante region, which has
a lower average selling price. The total order book as at 31
December 2022 stood at 448 homes (31 December 2021: 324 homes).
Group cash position
We ended the year with strong net cash(++) of GBP864 million (31
December 2021: GBP837 million net cash). This was ahead of
expectations largely as a result of reduced land spend in the
second half reflecting our highly selective approach to landbuying
as well as tight control on work in progress release to reflect the
lower sales rates.
Response to changing market conditions
As market conditions changed at pace in the third quarter we
acted quickly and decisively implementing even tighter cost
scrutiny, significantly reducing land commitments, and closely
controlling the release of investment in work in progress.
As we focus on maximising the efficiency of all our operations,
we have begun a consultation on a series of proposed changes which,
if they go ahead, would be expected to generate annualised savings
of around GBP20 million, and the costs to achieve these would be
c.GBP8 million. This incorporates proposed changes identified as
part of our ongoing drive to increase operational efficiency and
others that, if implemented, would reduce overheads to reflect
market conditions. The proposed changes would neither affect our
existing market coverage or ability to deliver volumes from our
landbank, nor our ability to deliver high quality product and
service to our customers.
Ongoing commitment to sustainability
We remain committed to the long term sustainability of the
business. In 2022, we progressed our net zero transition plan and
we submitted our net zero targets to the Science Based Targets
initiative (SBTi) for independent assessment.
Taylor Wimpey ranked fifth out of the FTSE 100 and was the
highest scoring housebuilder in the Responsibility100 Index Walk
Score that assesses companies on their commitment to key social,
environmental, and ethical objectives.
We have retained our focus on build quality and are the highest
rated major housebuilder in the independently measured 2022 NHBC
Construction Quality Review (CQR).
Outlook
Although we have strengthened our outlet position during 2022 as
planned, the ongoing market uncertainty means that sales remain
significantly below levels seen prior to the rise in mortgage rates
in Q3 2022. Accordingly, we enter 2023 with a lower private order
book than in recent years and we expect overall volumes to reduce
in 2023. We continue to focus on sales and supporting customers
through their purchasing decisions.
Pricing in the land market is yet to reflect the changing market
environment and with a strong land position and high quality
outlets, we will continue to operate on a highly selective
basis.
We remain confident that the medium to long term fundamentals of
our business remain highly attractive. With a strong balance sheet,
excellent landbank and a focus on operational execution, we
continue to run the business in the interests of all our
stakeholders, maximising long term shareholder value whilst
delivering much needed high quality homes.
* 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
revenue.
(++) Net cash is defined as total cash less total
borrowings.
Note:
(1) As published on 12 January 2023, the Company compiled
consensus expectation for full year 2022 Group operating profit
including joint ventures and excluding exceptional items is
c.GBP921 million.
-Ends-
For further information please contact:
Taylor Wimpey plc Tel: +44 (0) 7826 874461
Jennie Daly, CEO
Chris Carney, Group Finance Director
Debbie Archibald, Investor Relations
Andrew McGeary, Investor Relations
FGS Global TaylorWimpey@fgsglobal.com
Faeth Birch
Anjali Unnikrishnan
James Gray
Notes to editors:
For further information, please visit the Group's website:
www.taylorwimpey.co.uk
Follow us on Twitter via @TaylorWimpeyplc
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