Taylor Wimpey PLC (LON:TW.) said it welcomed “increased political stability” after the general election as the housebuilder reported more housing completion than expected for the past year but selling prices not up as much as hoped.
A trading statement for 2019 showed the group ended the year with an order book valued at £2.2bn and a net cash balance standing at £546mln, down 15% over the year but ahead of expectations.
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TW’s shares are the second-highest yielding in the FTSE 100 and, having paid £600mln of dividends to shareholders last year, the plan is to repeat the trick with another £600mln paid out in 2020 as the sun continues to shine on the sector.
The group completed 15,719 houses during calendar 2019, up 5% on the previous year, as its average selling price rose 2% to £269,000, which analysts said implied group revenues will be up around 6-7%.
City analysts had expected a 2% rise in completions and ASPs to increase 3%, leading to 4% turnover growth.
After a record sales rate of 0.96 homes per outlet per week, up from 0.80 a year earlier, but around an 8% decline in site levels, the group expects outlet numbers to be "broadly similar” in 2020.
Build costs rose around 4.5% over the year but, as the company said in November, recent months have seen “a softening” in cost pressures.
Chief executive Pete Redfern said: “Our results for the year to 31 December 2019 will be in line with our expectations.
“Despite an uncertain political and economic backdrop in 2019, we have continued to experience a good level of demand for our homes and trading in the second half of the year was as anticipated.”
Shares rose 2% to 205.5p by mid-morning on Tuesday.
UBS calculated that based on the sales and margin information, underlying profits (EBIT) should be roughly £850mln, slightly above consensus of £841mln.
The sales per site per week ended rate implies November and December continued at a good pace, "which is a very strong figure considering normal seasonality around Christmas", UBS analysts said, partly offset by lower site levels.
The size of the order book "points to 2020 revenue growth".
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