Economic uncertainty ridden out by Taylor Wimpey

Taylor Wimpey built 5% more homes in 2019 than in 2018 and started 2020 with an order book at an all time high.

In a trading statement today, house builder Taylor Wimpey said that its 2019 financial results would be in line with expectations and despite all the economic uncertainty the housing market remained generally stable.

Conditions in London and the southeast are challenging and more expensive houses are taking longer to sell, the company said, but overall the outlook seems bright for shareholders who got £600m in dividends last year and will get another £610m this year.

Chief executive Pete Redfern said: “Our results for the year to 31st December 2019 will be in line with our expectations. Despite an uncertain political and economic backdrop in 2019, we have continued to experience a good level of demand for our homes and trading in the second half of the year was as anticipated. The group has again delivered a record sales rate and we increased home completions by c.5% in the year.

In 2019, our focus was on strengthening the long term sustainablity of the business, further improving our build quality and customer offering, as well as increasing operating capacity and flexibility. In 2020, we will continue with these initiatives and will also prioritise a renewed cost focus and process simplification improvements”.

In 2019, total home completions reached 15,719, including joint ventures (2018: 14,933). Of these, 23% were affordable homes, as in 2018.

Average selling prices on private completions increased by 1% to £305,000 (2018: £302,000) with the overall average selling price increasing to £269,000 (2018: £264,000)

At the end of 2019 the order book was worth £2,176m excluding joint ventures (31st December 2018: £1,782m) which represents 9,725 homes (31st December 2018: 8,304 homes). Net cash balance stood at £546m at year end (2018: £644.1m).

Build cost inflation in 2019 was 4.5% but cost pressures have softened in recent months.