Trading Statement

RNS Number : 4295J

Taylor Wimpey PLC

30 June 2011

 



30 June 2011

Taylor Wimpey plc

Trading Statement and update on sale of North American business

The Group's UK operations have traded in line with our expectations in the first half of 2011 and we expect to deliver a strong improvement to margins as anticipated.  We are focused on delivering margin improvement on our existing land portfolio, continued progression of strategic sites through the planning system and the addition of new sites where good opportunities are identified.

The sale of our North American business is nearing completion, with all of the required regulatory and governmental approvals now received.  We will update the market once the transaction is complete.

Taylor Wimpey plc will announce its Half Year Results for the period ending 3 July 2011 on 3 August 2011.

Pete Redfern, Group Chief Executive, commented:

"I am very pleased with our ongoing performance improvement in the UK and we have made good progress towards completing the sale of our North American operations.  We are well positioned to deliver further margin improvement in the UK, beyond our double digit operating margin target for 2012, through the development of our extensive strategic land portfolio."

UK Housing

We have seen continued stability in UK market conditions since our Interim Management Statement in April.  There are ongoing signs of incremental improvement in mortgage lending, although the level of mortgage approvals remains very restricted.  We are working with the industry and the Council of Mortgage Lenders in order to facilitate further improvement and have secured funding to help over 1,200 first time buyers across England get on the property ladder through the Government's FirstBuy scheme.

We are currently operating from 313 outlets, compared to 284 at 4 July 2010.  Private sales rates, net of cancellations, average 0.56 sales per site per week for the year to date, broadly in line with the first half of 2010 (H1 2010: 0.58).  Cancellations remain at historic low levels, with the year to date average running at 15% (H1 2010: 16%).

We expect to complete around 4,550 homes in the first half of the year (H1 2010: 4,804 homes) at an average selling price of approximately £170k (H1 2010: £168k).

We remain focused on maximising the value achieved from each home completion and expect to report a strong improvement in the UK operating margin at the half year results (H2 2010: 6.7%).  We have delivered a further improvement in the margin on sales in our order book and we are now 79% sold for our targeted full year completions (H1 2010: 83% of target).

We maintain our consistent, disciplined approach to land acquisition and have approved the purchase of 5,257 new plots on 55 new sites since the start of 2011.  In addition, we have entered into a land sale and partnership agreement with Harworth Estates, the property division of UK Coal plc, for a portfolio of 16 strategic land sites with the potential to deliver up to 4,000 homes.  We continue to promote our strategic land portfolio through the planning process and have transferred c7,500 plots into the short term land portfolio over the last 18 months, equivalent to approximately 50% of completions over the same period.

We continue to engage with the government and with local authorities as the Localism Bill progresses through Parliament.  We have commenced a significant programme of internal training and are rolling out a framework of processes to position our business to benefit from the opportunities that the proposed new planning system will provide.   

North America Housing

Following the announcement of the conditional sale of our North American business on 31 March 2011, the parties have now obtained all of the required regulatory and governmental approvals. We will update the market once the transaction is complete. 

We expect the North American business to deliver approximately 1,750 completions for the first half (H1 2010: 1,843) at an average selling price of around £198k (H1 2010: £200k).  The North American business will be reflected as a discontinued operation in our half year results.

Spain Housing 

Market conditions remain challenging in Spain with restricted mortgage lending and the strength of the Euro against Sterling.

Board change

We have released a separate announcement this morning regarding the appointment of Mike Hussey, Chief Executive of Almacantar, as an Independent Non Executive Director with effect from 1 July 2011.

Outlook

We continue to expect a relatively stable market in the UK over the remainder of 2011, despite the ongoing economic uncertainty and restricted mortgage availability.

Our financial strength and track record of delivering planning consents makes us an attractive partner for landowners and we are in a strong position to invest in our short-term and strategic land portfolios where attractive opportunities are identified.  We continue to drive further margin improvement from our existing UK landbank and remain on track to achieve our target of double-digit operating margins in the UK in 2012, subject to continuing stable market conditions.  We expect to deliver further margin improvement beyond 2012 through the development of our extensive strategic land portfolio.

-ends-

For further information please contact:

Taylor Wimpey plc                                                                  Tel: [phone]

Pete Redfern, Group Chief Executive

Ryan Mangold, Group Finance Director

Jonathan Drake, Investor Relations

Finsbury                                                                                  Tel: [phone]

Andrew Dowler

Notes to editors:

Taylor Wimpey plc develops communities in the UK, North America and Spain. It aims to be the developer of choice for customers, employees, shareholders and communities.

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

www.taylorwimpeyplc.com

 

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