Despite uncertainty about the outcome of the upcoming general election, Taylor Wimpey sees little to worry about from politicians, especially now that its build costs are under control.
Chief executive Pete Redfern said: “Housing remains high on the political agenda with recognition of the importance of housebuilding to the economy and the need for more quality homes in the UK by all of the main political parties. Whilst there remains uncertainty around the outcome of the general election in May, consumer confidence remains solid and is supported by healthy underlying demand, low interest rates and high levels of employment. We therefore consider that the UK near term market risk is low.”
Taylor Wimpey built 12,454 homes across the UK in 2014, up 6.5% on 2013. Average selling price was up 11.5% to £213k (2013: 11,696 homes at £191k). The result was a 17% rise in group revenues to £2,686.1m (2013: £2,295.5m)
Mr Redfern said: "The UK housing market remains healthy and we are very confident in our ability to maximise returns on our investments whilst continuing to invest in the underlying quality of the business."
Operating profit for 2014 was up 54% to £480.7m (2013: £312.9m) meaning that the operating margin improved from 13.6% to 17.9%.
Reported pre-tax profit for 2014 was £468.8m, up 53% from £306.2m in 2013.
Pete Redfern said that while underlying build costs increased 5% last year because of the demand for both labour and materials, this became less of an issue as the year progressed. “During the year, manufacturing of key components of housebuilding such as bricks increased to keep pace with the growth of the industry and, as a result, we are now seeing reduced pricing pressure on materials," he said. "We anticipate that build cost inflation should somewhat reduce as the industry adjusts to the increased labour and material demand.”
He added: “It is pleasing to note that capacity for key supplies is increasing following greater certainty on the rate of housebuilding.”
The board is sufficiently confident that it is planning to double dividends paid to shareholders.
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