Taylor Wimpey PLC (LSE:TW.) said it expects full-year results to be in line with guidance as it announced a positive performance in the second half to date with good demand for its homes and a strong sales rate.
In its interim results in August, the housebuilder raised its guidance for full-year operating profit 2021 to £820mln.
In a trading statement, the company also said it remains on track to meet its medium-term operating margin target of 21%-22%.
Completions are still expected to show modest growth in 2022, followed by more significant growth in 2023, it added.
The company expects house price inflation to fully offset inflation in building costs.
“We have been building a strong forward order book for 2022 and continue to see good demand for our homes, supported by a positive market backdrop,” said chief executive Pete Redfern.
"Looking ahead, market conditions remain supportive, and with the benefit of our strong land position we are well placed to deliver against our medium term targets."
Taylor Wimpey said the global supply chain woes and lorry driver shortage have put pressures on the cost and availability of materials but these problems have eased. It predicted the situation would improve as suppliers adjust to current demand levels.
“We continue to effectively manage these pressures, aided by our scale and strong partner relationships and agreements,” it said.
The company reported a sales rate of 0.95 homes per outlet per week for the year to date, compared with 0.73 homes in 2020 and 0.97 homes in pre-pandemic 2019.
Cancellation rates for the year to date are 14%, compared with 21% last year and 15% in 2019.
The housebuilder said it has opened 64 new outlets so far this year, in line with expectations.
“Our sales rate has remained strong, and we are currently closing sales outlets ahead of schedule, with completions on these sites continuing into 2022,” it said.
It expects to grow outlets in the second half of 2022 and by a further 50 by mid-2023, “leaving us well positioned for significant growth in completions from 2023”.
The order book, excluding joint ventures, stood at £2.8bn, representing 10,643 homes, on 8 November 2021, compared with £3.0bn last year and £2.7bn in 2019.
Taylor Wimpey added 5,431 plots to its short term landbank in the second half to October, compared with 3,663 in 2020. The short-term landbank stood at around 84,000 plots at the end of October, up from 82,000 on 4 July.
Its strategic land pipeline rose to 148,000 potential plots from 147,000 during the period.
“We remain focused on efficiently progressing recently acquired land through the planning system, positioning our business to deliver annual completions in line with our previous guidance of between 17,000 and 18,000 in the medium term,” the company said.