By Lars Mucklejohn
Housebuilder Taylor Wimpey has today said it expects full-year operating profit to come in at the top end of its guided range for 2023, but flagged “difficult market conditions” and tough planning rules.
It reiterated its confidence that profit would come in closer to £470m than £440m, while also repeating guidance it would enter 2024 with a reduced order book.
The FTSE 100 firm delivered nearly 11,000 homes in 2023 including joint ventures, compared with just over 14,000 the year before.
This figure included 2,388 affordable homes, nearly a quarter (23 per cent) of its UK completions – up from 2,920 (21 per cent) in 2022.
Its net private reservation rate for 2023 was 0.62 homes per outlet per week, including bulk deals, compared with 0.68 in 2022. The cancellation rate was 18 per cent, the same as in 2022.
Its overall average selling price increased by 3.5 per cent to £324,000.
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The firm ended 2023 with a lower order book valued at £1.8bn, down from £1.9bn in 2022.
Taylor Wimpey said 2023 land approvals were “significantly lower” at around 3,000 plots, down from some 7,000 in 2022. The firm said its “strong land position” allowed it to be “highly selective in our land buying.”
The company also said the UK’s planning system remained slow, adding that persistent “material delays in planning and technical determinations” had impacted outlet openings.
Taylor Wimpey said it ended 2023 with a strong net cash position of £678m, down from £864m as of 31 December 2022.
“Whilst too early in the year to gauge customer behaviour, we have seen good levels of enquiries so far this year and it is encouraging to see recent mortgage rate reductions which will improve affordability,” the firm added.
“The planning environment remains challenging and will continue to impact outlet openings. However, as we look ahead, with a strong balance sheet and a highly experienced management team, we remain well positioned to optimise our strong landbank and strategic pipeline and remain confident in the attractive medium and long term fundamentals of the sector.”
Chief executive Jennie Daly said: “Despite the difficult market conditions throughout the year, we maintained a sharp operational focus and delivered a good performance.
Looking ahead, it is encouraging to see a reduction in mortgage rates, however, in the short term the market remains uncertain and the planning backdrop extremely challenging.”
