Interim Management Statement

RNS Number : 1755D

Taylor Wimpey PLC

25 April 2013

 



25 April 2013

Taylor Wimpey plc

Interim Management Statement

Strong start to 2013

Taylor Wimpey plc is holding its Annual General Meeting at 11:00 today in London, where the following comments will be made regarding current trading, financial performance and the outlook for the financial year, which covers the period from 1 January 2013 to today.

Pete Redfern, Chief Executive commented:

"We have made a strong start to 2013. Against a background of positive sentiment towards the housing market, we have seen an increase in visitor levels and reservations, driven by improved customer confidence and helped in recent weeks by the Government's Budget announcements. This, together with the quality of our locations and the inherent value in our landbank, is enabling us to drive improvement across all of our key performance measures."

Current trading

UK market conditions remain stable, with the positive trends that we highlighted at the time of our Full Year Results continuing. This has been led by the South East, with the London market which is of growing importance to us, performing well. Mortgage lending, however, has not increased fundamentally and continues to act as the principal constraining factor.

Our sales performance during the period has been at the upper end of our expectations. We achieved an average private net reservation rate of 0.67 sales per outlet per week for the year to date (2012 equivalent period: 0.62), with the increase seen primarily in the last eight weeks. We have also seen increased customer interest since the start of the year, up 15% before the recently announced Help to Buy scheme, and we have seen further significant increases following the announcement. Cancellation rates remain low at 13.6% (2012 equivalent period: 14.1%). 

Housing market sentiment has been boosted by the recent UK Government announcements, which will contribute to the delivery of much needed new homes. We have seen strong interest from customers towards the Help to Buy scheme and our marketing efforts have focused on helping customers understand the scheme and the options available to them. We have been able to capture this momentum and have supported our customers to reserve and register their interest in an additional c.300 homes since the scheme was launched on 1 April. Whilst we are encouraged by the initial signs, the overall success of the scheme remains dependent on lenders providing competitively priced mortgage products.

We have been focused on improving the quality and growing the size of our order book over the last four years. The value of our total order book stands at approximately £1.2 billion, up 27% from the year end and over 18% from the equivalent point last year (2012 week 16: approximately £1.1 billion). The scale of our order book stands at 7,355 homes, up 23% from year end and up 14% from the equivalent point last year (2012 week 16: 6,439 homes) excluding legal completions to date. Since the year end, we have generated an improvement in both pricing and margin in the order book.

We are delighted that we have once again been awarded the maximum five star rating in the Home Builders Federation's customer satisfaction survey, reflecting our commitment to customer service.

We strive to be recognised as the land partner of choice and as such are pleased to report that we have been selected for all four geographical panels of the Homes and Communities Agency (HCA) Delivery Partner Panel 2, and the newly formed Greater London Authority (GLA) London Development Panel. These framework panels, of pre-qualified housing developers, can be used by the HCA, GLA and other public landowners to facilitate the procurement, construction and development of housing-led schemes on their land.

Land portfolio, planning and outlets

Given the prevailing market backdrop, we are closely monitoring landbuying conditions for signs of increasing competition. Thus far, however, conditions remain stable and we continue to see an increased number of attractive opportunities in the land market, relative to historic norms and as such we remain net buyers of land. The strength of our existing strategic and short term landbank is our protection against the likely increase in the competitiveness of the short term land market over time and allows us to be highly selective. We have approved the purchase of 4,016 new plots on 25 sites since the start of the year. These sites have been acquired at similar contribution margins to 2012. In addition, we have secured a further 2,981 strategic land plots via options and freehold purchases since the start of 2013.

We remain committed to realising the full value of our land portfolio and actively and regularly review each site to ensure we capture value enhancing opportunities.

We are currently operating from 311 outlets, compared to 304 at this time last year.

Group financial position

Our balance sheet strength enables us to make the right choices for the business at the right time in the housing market cycle. Net debt remains lower than our expectations at £195 million as at 31 March 2013.

We are pleased to note that the underlying quality of the business and its future prospects has received further recognition by the credit rating agencies and, in recent weeks, upgrades have been announced from Moody's (to Ba3) with a positive outlook and Fitch (to BB+) with a stable outlook. 

Board changes

As announced on 1 March 2013, following the conclusion of the Annual General Meeting today, Brenda Dean will stand down from the Board as Non Executive Director and Margaret Ford will be appointed to the Board as a Non Executive Director.   

Outlook

We are encouraged by the recent improvement in market conditions and welcome the Government's approach. We do not forget, however, that the macro uncertainty which has characterised the last few years still remains and as such we retain a cautious approach, even given the more optimistic outlook. With our strategy in place, we expect to deliver significantly improved and more sustainable returns across the housing cycle. 

-ends-

For further information please contact:

Taylor Wimpey plc                                          Tel: [phone]

Pete Redfern, Chief Executive

Ryan Mangold, Group Finance Director

Debbie Sempie, Investor Relations

RLM Finsbury                                                  Tel: [phone]

Andrew Dowler

Sarah Heald

Notes to editors:

Taylor Wimpey plc is a UK-focused residential developer which also has operations

in Spain. Our vision is to become the UK's leading residential developer for creating

value and delivering quality.

For further information, please visit the Group's website:

plc.taylorwimpey.co.uk

 

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