Taylor Wimpey eyes 40 per cent jump in full-year profits

By GRAEME EVANS AND GARETH MACKIE
Published on 14/01/2013 08:53

Housebuilder Taylor Wimpey highlighted the better conditions in the housing market today as it prepares to announce annual profits at the top end of expectations.

As well as an anticipated 40 per cent rise in operating profits for 2012, the group said consumer sentiment over the first two weeks of 2013 had been the most positive it had seen in recent times.

It added: “Clearly it is too early to judge the market for the year, but we maintain a positive, although cautious view in the short term.”

The builder, which teetered on the brink of collapse in 2009 due to its massive debts, said it had been helped by a number of major lenders reducing their mortgage rates due to the Bank of England’s £80 billion Funding for Lending scheme (FLS).

It also reported a “substantial” order book at the start of 2013, with the increase in value to £948 million representing 5,966 homes.

The recovery in its trading performance was also highlighted in its UK operating margin, which is now in double digits compared with 8.8 per cent in 2011. The company is due to announce its results for 2012 on 1 March.

Shore Capital analyst John Bell said: “While some cynics might argue that the use of historical cost accounting, as well as strategy, is a key driver of the company’s significant increase in profits, there seems little doubt that the underlying market is benefiting from ever-lower mortgage rates and the impact of the FLS.”