Echoing statements made by sector peer Persimmon on Tuesday, house builder Taylor Wimpey said the first half of 2012 was a stable one for the housing market, enabling the group to report improvements across all of its key financial metrics.
The group achieved an average private net reservation rate of 0.60 sales per outlet per week, up from 0.56 in the first half of 2011. Cancellation rates remain below the long term average at 15.1%, much the same as in the corresponding period of last year.
Taylor Wimpey completed a total of 5,083 homes during the first half of 2012, up from 4,707 in the first half of 2011, of which 4,137 were private completions (H1 2011: 3,675), 893 were affordable completions (H1 2011: 1,004) and 53 were its share of joint venture completions (H1 2011: 28).
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The overall average selling price of these completions increased to circa £175,000, or £175k, from £168k the year before. The average selling price on private completions increased to circa £188k, reflecting a higher quality product mix in terms of both size and location (H1 2011: £182k). The average selling price on affordable completions decreased to circa £115k (H1 2011: £117k).
The group expects to report an operating margin for the first half of 2012 of around 11%, up from 8.4% (restated to take account of the disposal of the North American business) in the first six months of 2011.
The total order book value, excluding completions to date and joint ventures, was £960m at July 1st, 2012, versus £932m at July 3rd, 2011. This growth in the value of the order book has been driven by private reservations, with an 18% increase in the value of the private order book more than offsetting a decline in the value of the affordable order book.
Net debt was below £150m as at 1st July 2012 and, having resumed dividend payments at the time of its full year results, the board confirmed it intends to pay an interim dividend at the half-year stage this year, and this will be calculated with reference to the net asset value of the group and is expected to represent around one-third of the total dividend for the year.
"Trading in recent weeks has continued to be stable, in spite of the ongoing uncertainty in the wider economy. Assuming that current stable market conditions persist, we expect to continue to achieve improved performance period on period and to deliver full year returns in 2012 that are in line with our expectations," the group said.
JH
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