Taylor Wimpey raises profit target after record first half

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The FTSE-100 housebuilder now expects operating profit in 2021 to exceed £820mln

() PLC has raised its full-year profits guidance after a record first half buoyed by an average 7% increase in selling prices.

The FTSE-100 housebuilder now expects operating profit in 2021 to exceed £820mln, which is higher than the top end of its previous estimates.

Average prices for private sales rose to £327,000 (£307,000) over the six months to end June as the temporary stamp duty holiday sparked a buying surge.

()’s total selling price rose by 11% to £299,000 as there were fewer affordable houses in the mix this time.

Completions recovered to 7,300 houses, which was a record and boosted by some deals being delayed from the end of last year.

Revenues jumped by 191% to £2.2bn, while operating profits were £424mln against a loss of £30mln a year ago.

Pre-tax profits were £288mln as Taylor Wimpey took a £125mln provision for cladding remedial work.

Net cash at the half-year was £907mln, while the group resumed dividends as flagged with a 4.14p payment costing £151mln.

For the full year, the builder said it expects to complete on between 13,200-14,000 homes, which is at the upper end of guidance, while the order book is worth £2.7bn.

In the medium term, Taylor Wimpey said it is looking at accelerated volume growth from 2023.

“In the past 12 months we have approved a record c.32k plots in line with our medium-term operating margin target of c.21-22% and at a ROCE of over 30%, taking timely advantage of the lack of competition in the land market last year.” 

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