Taylor Wimpey flags profits leap on loans boost
Tuesday 15 January 2013
Housebuilder Taylor Wimpey nearly went bust in 2009 but hailed thawing mortgage markets today as it flagged up profits at the top end of City hopes.
Just two weeks into 2013, the firm says “consumer sentiment towards the housing market is more positive than we have seen in recent times”, reigniting the threat of long-term price rises as housebuilding fails to keep up.
The firm, which was almost sunk by an ill-timed merger with George Wimpey at the top of the market in 2007, hailed cash flooding into mortgage lending from the Bank of England’s Funding for Lending drive. Government backed initiatives to help first-time buyers — the FirstBuy and NewBuy schemes — are also helping.
Chief executive Pete Redfern is still cautious about the rest of the year but said: “We tend to be a lead indicator of sentiment. We have more than 300 sites and we are seeing a more positive tone. The mortgage market feels more open for business.”
Pre-tax profits this year will be towards the top end of City forecasts of £210 million-£230 million. The firm returned to the dividend list last year and Taylor Wimpey’s order book is already bristling with £948 million in new orders, up 14% on last year.
Net debt, which stood at £1.6 billion four years ago, has been slashed to just £60 million.
The builder has 35 sites in the capital but says the signs of life are not confined to buoyant London and the South-east. “It is fairly broad based in terms of customer and geography,” Redfern added.
Prices are also being boosted by a shortage of housing. Aside from the mortgage market, Redfern said: “The other very significant factor is scarcity of supply. There is high demand, the rental market is very strong and gradually the economics of the housing market are moving in favour of buying.”
He adds: “It seems extremely unlikely that the level of planning permissions is going to increase significantly, while as the economy recovers there will be untapped demand emerging. It is difficult to see how that is not going to lead to house price increases.”
The shares were flat at 74.1p today although investors have enjoyed a 90% rise over the past year.
- 1 Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
- 2 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 3 Halle Berry takes ex-boyfriend Gabriel Aubry to court for allegedly trying to make daughter look less African-American
- 4 Isis propaganda image showing 'abuse of Muslim woman by soldiers' is actually taken from Hungarian porn film
- 5 'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
Turkish President: 'Equality between men and women is against nature'
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Ferguson decision: Tea Party website mocks Michael Brown's family over T-shirt typo
Michael Brown shooting: Ten things we know – or know better – now the Ferguson grand jury's work is over
Isis propaganda image showing 'abuse of Muslim woman by soldiers' is actually taken from Hungarian porn film
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
France 'blocks' Russian sailors from boarding a warship
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Revealed: How the world gets rich – from privatising British public services
iJobs Money & Business
£Attractive: Citifocus Ltd: High calibre individual with significant product d...
£Negotiable: Citifocus Ltd: Leading global bank seeks experienced credit analy...
£Attractive Package: Citifocus Ltd: High calibre individual with a high degree...
£Attractive: Citifocus Ltd: High calibre individual with superior academics an...