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Mon March 08 2021

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Taylor Wimpey woos investors with promise of 15% return

13 May 14 House-builder Taylor Wimpey is today set to promise investors 15% annual returns for the next three years

Company directors will outline new targets for the next three years when it plays host this afternoon to a delegation City analysts and institutional investors at a site visit to the Chobham Manor neighbourhood, under construction in the Olympic Park.

Taylor Wimpey says that, with the UK housing market continuing to perform strongly, it is in line to meet or exceed all the 2105 targets that it set itself in 2011.

Given the improved market, it has now set new medium-term targets for 2015 to 2017, including: an average operating margin of 20% over the three year period; a return on net operating assets of at least 20% a year; and an average increase in net assets, including returns to shareholders, of 15% a year over the three year period.

Longer term targets also remain in place, including a 15% return on net operating assets through the cycle.

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The company said: “Since we first communicated our strategy in 2011, we have consistently outperformed the pace of improvement that we set and we are confident that by the end of 2015, we will have met or exceeded each of our key financial targets. During this time we have continued to improve the quality of our landbank, through disciplined land buying and importantly the record conversion of plots from our strategic land pipeline. In 2014, we now expect to deliver an operating margin increase of at least 300 basis points, and a return on net operating assets of at least 20%.

“We remain disciplined and focused on the long term, continuing to target improvement across all measures to deliver the best quality and sustainable returns for our shareholders. Our strategy has not changed and neither have our key strategic financial objectives which were purposefully set as through the cycle measures:

  • Earn top quartile operating margins
  • Deliver at least a 15% return on net operating assets through the cycle
  • Grow net assets by 10% per annum on average (including returns to shareholders) through the cycle.

“These long term targets remain appropriate, however we are currently operating in a much improved housing market, and the strength and quality of our landbank and strategic pipeline, gives us the confidence to set additional challenging medium term targets across each of these financial objectives.”

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