Taylor Wimpey PLC (LSE:TW.) reported on Thursday some signs of improvement in current trading but still warned completions in 2023 would be around 40% lower than 2022.
In its annual results for the 12 months to 31 December 2022, the housebuilder said revenue rose 3.2% to £4.42bn from £4.28bn while pre-tax profit of £827.9mln was up 22% from £679.6mln in the previous year.
Earnings per share rose 10% to 19.8p from 18p and the firm increased the dividend by 9.6% to 9.40p from 8.58p in 2021.
Chief executive Jennie Daly said the group’s well located landbank and strong financial position underpin the dividend policy “of paying out 7.5% of net assets, or at least £250mln, annually throughout the cycle".
Group completions were 14,154 in 2022 but the FTSE 100-listed group warned that assuming prevailing market conditions continue and given a challenging planning backdrop, completions in 2023 would be sharpy lower.
“We currently expect 2023 completions to be in the range of 9,000 to 10,500, broadly equivalent to a net sales rate assumption of 0.5 to 0.7, with completions more weighted to the second half, reflecting the lower sales rate since the third quarter 2022,” the company said.
Taylor Wimpey said current trading had shown some signs of improvement from the fourth quarter of 2022 with the year-to-date net private sales rate (w/e February 26 2023) 0.62 per outlet per week and the four-week average running at 0.66 per outlet per week.
This is an improvement on the sales rate of 0.48 homes per outlet per week in the second half of 2022.
“This improved sales rate follows recent reductions in mortgage rates, early signs of stabilised customer confidence, usual seasonal trading patterns and the benefit of our focused promotional activity,” the company said.
But the builder cautioned that despite the uptick in sales and ongoing robust customer interest in its homes, reservation rates are significantly lower than in recent years as affordability concerns weigh, particularly for first-time buyers.