Interim Management Statement

RNS Number : 1135C

Taylor Wimpey PLC

26 April 2012

 



26 April 2012

Taylor Wimpey plc

Interim Management Statement

Taylor Wimpey plc is holding its Annual General Meeting at 11:00am today in London, where the following comments will be made regarding current trading, financial performance and the outlook for the financial year.  In line with the requirements of the UK Listing Authority's Disclosure and Transparency Rules, this Interim Management Statement covers the period from 1 January 2012 to the date of this announcement.

UK housing market conditions remain stable and the Group is trading at the upper end of our expectations.  We continue to expect to deliver further steady improvement in margin, return on net operating assets and net asset value through the ongoing delivery of our strategy, the key elements of which are:

·     Prioritisation of both short and long term margin performance ahead of volume growth;

·     Development of our extensive strategic land portfolio in combination with targeted short term land acquisitions;

·     A comprehensive focus on improving returns from both our existing land portfolio and newly acquired sites through our value management process; and

·     Ongoing proactive management of the Group's capital structure, operating structure and level of land investment to maximise performance across the housing market cycle.

Current trading

UK market conditions remain stable, with underlying pricing unchanged.  Although mortgage availability remains restricted, the introduction of the NewBuy mortgage indemnity guarantee scheme in March has facilitated access to 95% mortgages.  We have seen strong interest from customers in the scheme since its launch, but its success will depend on lenders providing competitively priced mortgage products.

We are encouraged by the ongoing strength of our sales performance, achieving an average private net reservation rate of 0.62 sales per outlet per week for the year to date (2011 equivalent period: 0.57).  Cancellation rates remain below the long term average at 14.0% (2011 equivalent period: 14.6%).

We have increased the value of our order book, excluding legal completions to date, to £1.03 billion, up by 23% from the year end and by 16% from the equivalent point last year (31/12/2011: £835 million, week 15 2011: £888 million).  This growth has been driven primarily by private reservations and we have achieved further improvement in both pricing and margin in the order book since the year end.

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

Land portfolio, planning and outlets

We remain of the view that it is appropriate to hold a longer land portfolio at this stage of the market cycle, due to the increased number of attractive opportunities in the land market.  We maintain our consistent, disciplined approach to land acquisition in order to maximise the quality of our portfolio and have approved the purchase of 4,085 new plots on 32 sites since the start of the year.

We continue to develop our extensive strategic land portfolio, both through new acquisitions and through success in obtaining planning consents.  We have added a further 2,242 potential plots to the strategic portfolio since the start of 2012 and have achieved planning consents on circa 930 plots.

We welcome the publication of the National Planning Policy Framework which, if used positively by all participants, can deliver a far more constructive, creative and open planning system.

Our primary goals with new outlets continue to be to optimise planning consents and to value-engineer sites prior to opening.  We are currently operating from 306 outlets, compared to 303 this time last year.

Group financial position

Our balance sheet remains strong, with net debt lower than our expectations at £218 million on 31 March 2012.  It is also pleasing that the strength of the business has been recognised by the credit rating agencies and we have received upgrades from Moody's (to B1) and Fitch (to BB-) in recent weeks.

This balance sheet strength allows us to make further selective investment in our land portfolio to maximise our performance across the housing market cycle and to return excess capital to shareholders as appropriate.  However, mindful of the ongoing uncertainty in the wider economy, our high quality land portfolio, increased order book and strong balance sheet also give us a strong position should market conditions weaken.

Outlook

While mortgage availability remains a constraint on the housing market, we have made a strong start to the year and remain confident of our prospects in 2012.  We continue to expect to deliver further steady improvement in margin, return on net operating assets and net asset value through the ongoing delivery of our strategy.  In particular, we are achieving margins at the upper end of our expectations through strong performance on new sales outlets and further enhanced returns on those new outlets sourced from our strategic land portfolio. 

-ends-

For further information please contact:

Taylor Wimpey plc                                                                  Tel: [phone]

Pete Redfern, Chief Executive

Ryan Mangold, Group Finance Director

Jonathan Drake, Investor Relations

RLM Finsbury                                                                          Tel: [phone]

Andrew Dowler

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:

http://plc.taylorwimpey.co.uk

 

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