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Taylor Wimpey Fundamentals (TW.)

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Taylor Wimpey has hiked its FY pretax profit to £468.8m, from £306.2m. Revenue was £2.69bn, from £2.3bn. Its total maintenance dividend was 1.56p a share, from 0.69p, with the final dividend at 1.32p, from 0.47p.

CEO Pete Redfern said 2014 was an excellent year for Taylor Wimpey, delivering a 54% increase in operating profit whilst contributing £300m to communities via planning obligations, providing key infrastructure, education and affordable housing.

"The beginning of spring selling season has seen trading at the better end of expectations. Customer confidence is high with good levels of employment and an affordable mortgage environment.

"The UK housing market remains healthy and we are very confident in our ability to maximise returns on our investments whilst continuing to invest in the underlying quality of the business.

"We believe that the current strong performance can be sustained and improved and therefore we have proposed a doubling of the 2014 maintenance dividend pay-out to the top end of our dividend policy range."

Looking ahead, Redfern said:
"We are currently operating in a housing market underpinned by a significant structural demand and supply imbalance. Housing remains high on the political agenda with recognition of the importance of housebuilding to the economy and the need for more quality homes in the UK by all of the main political parties.

"Whilst there remains uncertainty around the outcome of the General Election in May, consumer confidence remains solid and is supported by healthy underlying demand, low interest rates and high levels of employment. We therefore consider that the UK near term market risk is low.

"The beginning of the spring selling season has seen both demand and trading at the better end of our expectations. Net private sales rates for the year to date (w/e 1 March 2015) of 0.70 are at healthy levels (2014 equivalent period: 0.72) and within the range we see as sustainable.

"With slower market growth, we anticipate reducing build cost pressure in 2015.

"As at 1 March 2015, we are 51% forward sold for private completions for 2015 with a strong total order book of £1,657 million (2014 equivalent period: £1,529 million). This together with our strong landbank, with over 50% of plots sourced from the strategic pipeline, positions us well for 2015 and beyond.

"We remain confident that our long term strategy, enhanced by the stretching medium term targets we announced in May 2014, will enable us to maximise the best quality returns from our investments on a sustainable basis across the housing cycle."

Skinny,

Thanks for the direct to Where next for the housebuilding sector?

Interesting, I am heavy on builders and relieved not to be out on a limb.

Skinny,

Thanks for the direct to Where next for the housebuilding sector?

Interesting, I am heavy on builders and relieved not to be out on a limb.

Perhaps you may be interested in this then - UK construction growth unexpectedly surges in February - PMI

Mar 16:

Goldman Sachs: Conviction Buy: TP: 202

Deutsche; Buy - TP now 173p

They are so fickle! :-)

to my mind it's a toss up between TW and BDEV, both of which perform similarly
a good place to be both before the budget and the election

Plus div 9th april 1.32p and 21st May 7.68p

M.

Buy both.

I hold TW since 2009 and BDEV for a shorter period.

Also, hold SBs with wide stops for trading.

Liberum Capital Buy 150.35 150.50 152.00 165.00 Reiterates

i think house builders in general has to be the right sector even before the election

cynic, I agree - a Sector that's seeing Demand and NIMBY regulations appear to be restricting all but expensive developments.
What I don't understand is why on the one hand we need so many Houses, yet we ( Govs ) fail to build them. Never understood "Affordable", either - surely that means a modest multiple of Wages?, That varies across the Country...forget London/SE and elsewhere houses should be starting at £100k for a 2-bed with parking on the drive. That's hardly enough for a modern family with 2+ children and 2x cars . . . . meaning they need something like 4-bed with double garage.. ~£150k - but with land in such short supply, that price would be impossible...
Do we need to have a better/cheaper/faster method of building?

yes but people wouldn't like it

just as pre-fabs were put up just after the war, and lasted many many years longer than anticipated, so now we could use 20/40' shipping containers
these are already used as temporary accommodation and offices all over the world including uk, and nor need they be visually ugly

unfortunately, and it is a sad fact, the current wannabe house owner wants (tries to demand) accommodation that is far beyond realistic expectations, let alone income

we should also be doing far more to regenerate existing but empty but (relatively) derelict stock

"Do we need to have a better/cheaper/faster method of building?"........These guys are trying to do it, but are struggling to make money out of it at the moment:

http://www.marcityhomes.com/mar-city-homes/unique-modular-homes/

btw, straw is another method of cheap, highly energy efficient and surprisingly long-lasting construction
a major downside is that the walls are about a foot thick, so the footprint is much greater than for a traditional house

Harry, it's a shame they seem to be struggling, as it makes sense - some chain hotels have been using this modular approach for some years.

Cynic - a foot is about similar to a modern cavity wall - see the bottom row here.

Yes, but when I read luxury apartments where does it leave the average homebuyer!
So we're back to square one.

In Solihull! :-)

at present yes, but i believe my solution (#109) would truly work but no one in power seems to want to explore something quite so obvious

of course, first time buyers would help themselves if they weren't quite so precious with sights set on 3-4 bedrooms + garage + garden! .... oh, and of course a really nice neighbourhood with first class schools