Taylor Wimpey PLC (LON:TW.) has, as expected, delivered strong growth in 2016 profits as it continues to return large amounts of cash to shareholders.
The FTSE 100-listed housebuilder saw its pretax profits before exceptional items rise by 21.5% to £733.4mln for the year to December 31, up from £603.8mln a year earlier.
The group’s revenues increased by 17.1% to £3,676bn, up from £3.139bn a year earlier as it completed a total of 14,112 homes in 2016, excluding joint ventures
It said its saw a 10.9% increase in UK total average selling prices to £255,000, up from £230,000 from 2015.
Dividends to shareholders totalled £355.9mln during 2016 and are set to rise to £450mln this year.
Robust current trading …
On current trading, Taylor Wimpey “We have made a very good start to 2017 and are encouraged by robust trading and levels of demand.
“The UK housing market fundamentals remain good with strong customer confidence in our core geographies.”
The group said its net private sales rate for the year to February 19 has increased to a “very strong” 0.91 from 0.77 in the equivalent period in 2016
It added that it expects “underlying build cost increases during 2017 to be at a similar level to 2016, at around 3-4%.”
The firm added: “The early signs of stability and resilience of the market following the EU Referendum, which were encouraging, continued and we believe the risk of material impact from this in the short term has significantly reduced.”
Pete Redfern, Taylor Wimpey’s chief executive, said: "In 2016 we delivered an excellent performance set against an uncertain political and economic environment that stabilised in the final quarter.
“The outlook for 2017 is for ongoing stability and incremental price growth, which is a healthy backdrop for our business and our customers."
But shares slip ...
However, in early morning trading, Taylor Wimpey shares drifted 0.2%, or 0.4p lower to 178p.
George Salmon, equity analyst at Hargreaves Lansdown, said: “After strong numbers from its peers in the sector, it is not at all surprising that Taylor Wimpey has delivered a good set of results.”
He added: “Demand continues to outstrip supply and record low interest rates mean affordability remains high even as prices rise. Viewed from this perspective, it is easy to see why the group is bullish.
“However the UK’s housing market is nothing if not fickle, and the 7.8% yield on the shares shows that the wider market remains cautious.”
-- Adds share price, broker comment --