Build costs are increasing but builders are struggling to pass these on to customers.
In the six months to 30th June 2019 Taylor Wimpey completed a total of 6,541 homes, up 0.7% on the 6,497 completed in the first half of 2018 (excluding joint ventures).
From this it generated revenue up 0.8% to £1,732.7m but operating profit fell by more than 9% to £311.9m (2018 H1: £344.3m), bringing the operating margin down from 20% to 18%.
Profit before tax was down just 0.4% to £299.8m (2018 H1: £301.0m).
Taylor Wimpey attributed the dip in profits to “higher build costs and geographic mix”. While demand for new housing remains robust, the company said, sale prices were not rising.
It said the picture for full year was likely to be similar. Volumes would be slightly higher than 2018 but profits lower. “In this environment where pricing is flat, and there is increased build cost pressure, our margins will be lower in 2019 than in 2018,” it said.