By Laura McGuire
Taylor Wimpey posted a 44.5 per cent decline in operating profit in the half year, as the house builder said it was “inevitably” impacted by red hot mortgage rates which have shattered consumer confidence.
The London-listed construction firm reported a 21.2 per cent contraction in revenues down to £1.6bn compared to £2bn in the same period last year.
Profit before tax was also down 28.9 per cent to £237m.
“The first half of the year has been characterised by variable market conditions including substantially higher mortgage rates,” chief of Taylor Wimpey, Jennie Daly, said.
“While this has inevitably impacted our results, I am pleased that we have delivered a resilient performance with first half completions slightly ahead of our expectations.”
The group ended the quarter with net cash of £654.9m up from £642.4m in the same period last year.
The results come amid a challenging period for the house builders, who have been battling a decline in activity ever since the central bank hiked interest rates for a 13th consecutive time.
While some High Street lenders were beginning last week to reduce the cost of their deals, which would boost buyer confidence, it has been predicted that the Bank of England will raise rates again in efforts to fight inflation.
However, Taylor Wimpey said that its order book remains at the “upper end” of its previous guidance, with plans to build between 10,000 to 10,500 homes during the year.
Unlike many of its competitors, Taylor Wimpey’s share price has nibbled up this year, but remains around half of its peak prior to the pandemic.
The firm is also sitting on a ‘short term landbank’ equivalent to just north of 80,000 homes.
