Taylor Wimpey hikes earnings outlook after swinging to first half profit

Taylor Wimpey hikes earnings outlook after swinging to first half profit
The group posted pre-tax profits of £287.5 million for the six months to July 4, against losses of £39.8 million a year ago.

Housebuilding giant Taylor Wimpey has raised its full-year earnings outlook after swinging to a first-half profit amid Britain’s booming property market.

The group posted pre-tax profits of £287.5 million for the six months to July 4, against losses of £39.8 million a year ago.

It made half-year operating profits of £424 million, against losses of £16.1 million, as it completed on a record 7,303 homes, helped by delayed transactions from the end of last year and a property market that has been firing on all cylinders.

Taylor said it now expects full-year group earnings to beat market expectations – at around £820 million – with completions also set to be at the top end of the 13,000 to 14,000 forecasted range.

House prices and buyer activity have surged over the past year thanks to the stamp duty holiday and changing demands due to the pandemic and remote working trend.

But stamp duty relief has been tapered since the end of June and will revert back to the original threshold at the end of September, which has already seen values begin to edge lower, according to recent house price indices.

Taylor said it has yet to see any cooling in demand.

“The UK housing market remains strong, underpinned by low interest rates, good mortgageavailability and Government support for customers,” Taylor said.

“There have been healthy levels of customer interest in reservations extending well beyond the end of the Stamp Duty Land Tax holiday,” it added.

It said its private homes developments were around 99% forward sold as at August 1, up from some 97% a year earlier and 87% two years ago.

But the firm joined rivals in flagging rising material and build costs, which are having an impact across the construction sector.

It said this was being offset by “healthy” house price growth.

Taylor’s results also confirmed a £125 million charge for remedial works on potentially unsafe cladding on apartment blocks in the wake of the Grenfell Tower tragedy.

The group said in March it would set aside the cash to fund the replacement of cladding and other fire safety work on all its developments built in the past 20 years.

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