Taylor Wimpey builds on solid housing market as it posts profit surge
A strong UK housing market helped Taylor Wimpey post a bumper set of results in 2016, as the house builder hailed stable demand following fears that Brexit might put people off buying a home.
The FTSE 100 company reported revenues up 17pc to £3.7bn in 2016, while pre-tax profits rose by more than 20pc to £732.9m.
The house builder has also enjoyed a solid start to the new year, selling on average 0.91 homes a week per site in the first seven weeks of 2017, compared to 0.77 a year ago, as chief executive Pete Redfern said the market was “lower risk” than in 2016.
“People still feel pretty secure in their jobs, redundancies remain low and unemployment remains low,” said Mr Redfern. “I think people are reasonably confident about their own position and if people can borrow sensibly, buying a home is a lot less expensive than renting.”
He added that the Government had “moved into a place where it is more focused on delivery than on big statements”.
In the UK, Taylor Wimpey built a total of 13,808 homes last year, up 4.5pc from 2015, and it welcomed the measures set out in the Government’s recent housing white paper.
House builders were among the big winners of the white paper, which outlined plans to construct 200,000 “decent, well-built homes with gardens” by 2020.
“I think it’s grown-up, in the sense that it is quite a long list of tweaks and changes to planning policy,” said Mr Redfern.
“It shares out a bit of pressure around the market and will hopefully lead to a steadily growing volume. There was never a short-term, quick answer and you have to accept that long-term answers take time. So it’s not radical, but it’s moving in the right direction.”
Taylor Wimpey announced that shareholders would receive a total dividend of around £450m, 13.8p share, up from £366m in 2016.
Earlier this week, fellow house builder Persimmon revealed that 2016 profits had risen by nearly 25pc as it put up almost 600 more homes than in 2015.