Taylor Wimpey has lifted its half-year profits by a third to £238million and increased its shareholder cash payout by a fifth to £300m, as a more stable housing market continues to underpin the sector boom.
The housebuilder’s shares were steady yesterday but are up 35per cent this year and 10per cent since the general election.
It said house completions in Scotland were keeping pace with its UK performance, while noting that the Scottish Help to Buy scheme had been “stop-start” compared with the English version.
Chief executive Pete Redfern said the market was underpinned by house price inflation of three to four percent, which felt more balanced and sustainable than levels of 10 percent seen a year or so ago, and its land bank was now big enough to sustain its ambition of building around 14,000 homes a year.
Taylor Wimpey said it would repeat its special dividend to shareholders next year, paying out £300m in July 2016 to follow this year’s windfall of £250m.
The group said that since May, it had seen a more significant improvement in consumer confidence, and in mortgage availability and cost, giving rise to a stronger second quarter which had continued into July. Sales rates were above expectations and sales price growth had increased.
It went on: “We welcome the planning reforms announced by the Chancellor in the summer Budget on 8 July...We believe these proposals to be directionally positive and look forward to evaluating the detail surrounding them. We are also particularly pleased to see the Government’s continued focus on increasing the number of apprenticeships, which are critical to our industry.”
Taylor Wimpey expects sales rates to slow down in the second half and would end the year at a ‘normal’ market level. It says that modest interest rates rises are “unlikely to significantly disrupt the housing market environment”.
On the group’s share price performance this year, Ryan Mangold, finance director, said: “I think there is a realisation from investors that the good work we have done in the land markets over the last three to four years is coming through.” He said consolidation in the sector since 2009 had reduced competition for land, while banks had been reluctant lenders to smaller players.
“We have also taken a bit more control of the planning process through our strategic pipeline on land that doesn’t have residential planning consent.”
Mr Mangold had commented in March that while the UK government-backed Help to Buy scheme continued to play an important part in a significant number of house purchases, the fact that the Scottish scheme ran out of money early in the financial year had led to many people delaying their completions.
On the repeat this year, with Scottish Help to Buy already closed, Mr Mangold said the group expected positive progress on Scottish completions, but for people aiming to get onto the property ladder it meant having to deal with a “stop-start” scheme.
The company is building at sites in Scotland including Bishopbriggs, Cambuslang, Lenzie, East Kilbride, Musselburgh, Bathgate and Bonnyrigg.
Taylor Wimpey has a total order book of £1.99bn, up from £1.64bn a year ago, which it said gave “good visibility and security for 2015 and beyond”.
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