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Taylor Wimpey pre-tax profit grows 22%

2 Mar 23 Despite the house-building market coming unstuck at the back end of the year, Taylor Wimpey has posted improved revenue and profits for 2022.

Taylor Wimpey chief executive Jenny Daly
Taylor Wimpey chief executive Jenny Daly

Group revenue was up 3.2% to £4,419.9m in 2022 (2021: £4,284.9m) and pre-tax profit was up 22% at £827.9m (2021: £679.6m).

The 2022 result included £80m of provisions related to post-Grenfell building safety repairs; the 2021 result included £125m of provisions. Excluding exceptional items, pre-tax profit was up 13%.

Group completions were down 1% to 14,154 units (2021: 14,302) but this was offset by an increases in selling prices.

This year’s completions likely to substantially lower than in ether 2022 or 2021, however. Although sales have picked up since the immediate aftermath of that notorious Truss/Kwarteng budget that threw the economy off course, they remain lower than usual for the time of year.  The 2023 year-to-date net private sales rate for Taylor Wimpey is running at 0.62 per outlet per week, compared to 1.02 this time last year. Build programmes for this year have been scaled back accordingly, the company said. Persimmon said something similar yesterday: at current rates 2023 output is looking like being 40% down on 2022, Persimmon said.

Taylor Wimpey chief executive Jenny Daly, in her first annual results presentation since taking over from Pete Redfern last April, said: "We have delivered a strong financial and operational performance in 2022 with full year operating profit in line with expectations. We are particularly pleased to have delivered a strong operating profit margin as a result of tight operational controls and price discipline.

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"In a year marked by two distinct halves, we acted quickly and decisively to address rapidly changing market conditions in the second half of the year and continued to focus on operational excellence and efficiency. While the weaker economic backdrop continues to impact the near-term outlook, customer interest in our homes remains good and, whilst it is still early in the year, trading has shown some signs of improvement compared to Q4 2022.

"Looking forward, we have a strong proposition that is clearly recognised and valued by our customers, supported by our sharp operational focus and highly experienced teams. We have a high-quality, well located landbank and a strong financial position.”

However, she added: “While it is encouraging to see an uptick in sales and ongoing robust customer interest in our homes, as previously announced, our reservation rate is significantly lower than in recent years as affordability concerns weigh, particularly for first time buyers, and we have reflected this in our build programmes for the year.”

Jenny Daly also said that first deliveries from a new timber frame factory in Peterborough are expected towards the back-end of the year.

“We plan to expand our timber frame activities with a new facility in Peterborough that will help fulfil our goals to increase timber frame usage on our sites and improve visibility and security of supply, offering both operational and environmental benefits,” she said.

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