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Thu September 19 2019

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Ground rent scandal dampens Taylor Wimpey profits

28 Feb 18 Taylor Wimpey saw its pre-tax profits dip 7% in 2017 due to the cost of addressing the leasehold scandal.

Taylor Wimpey announced in April 2017 that it was setting aside £130m to buyers of its home trapped with spiralling ground rents. It transpired that Taylor Wimpey, and some other house-builders, had sold freeholds to third party investment companies who then hiked the bills.

Including this £130m provision, Taylor Wimpey’s pre-tax profit in 2017 was down 7% to £682m. Before exceptional items, profit was up nearly 11% to £812.0m (2016: 733.4m).

Total revenue was up 7.9% to £3,965.2m (2016: £3,676.2m).

Shareholders are in line for a £500m payout in 2018, on top of the £450.5m total dividends paid in 2017 and £355.9m in 2016.

Taylor Wimpey completed 14,842 homes in 2017, including Spain and joint ventures, which was up 4.6% on 2016’s total of 14,185.

Chief executive Pete Redfern said: "2017 was another strong year for Taylor Wimpey and we enter 2018 in a good position with positive forward momentum. We have been encouraged by early trading patterns at the start to the year and despite some wider macroeconomic uncertainty, consumer confidence remains robust and market fundamentals are solid.

“We grew volumes to nearly 15,000 homes during the year and are focused on delivering much-needed homes across the UK to the highest quality and standard. Importantly, we are pleased to see that our investment in customer service has resulted in a notable improvement in our customer satisfaction scores.”

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