Record Taylor Wimpey year with impetus from low rates

Housebuilder Taylor Wimpey's high-stepping progress continued last year, with record order books, a ­one-third rise in profits and previously announced plans for another £300 million ­special dividend for shareholders this July.

Taylor Wimpey: 34 per cent profit jump

That follows a £250m special dividend to investors last July, and £50m the year before, bringing the total of one-off payments to about £600m in two years.

Taylor Wimpey, which employs about 400 people in Scotland and which has two main sites at Monifieth, Angus, and East Calder, West Lothian, yesterday posted underlying pre-tax profits up 34 per cent to £603.8m in 2015. That compared with £450m in 2014.

The company’s revenues rose 17 per cent to £3.1 billion, while profit margins – return on sales – lifted to a record 20.3 per cent from just under 18 per cent.

Peter Redfern, chief executive, said the company built more than 13,000 homes across the UK in 2015 against a “robust” housing market backcloth. This was up 7.5 per cent from 12,294 homes built in 2014.

Redfern said: “2016 has continued to be positive across all our regional markets, with demand strong and good access to mortgages.” Taylor Wimpey’s total average selling price lifted 8 per cent to £230,000 from £213,000 the previous year.

The group built 1,100 units in Scotland, up from just over 1,000 in the previous 12 months, while the Scottish average selling price edged up 1 per cent to £205,000.

Ryan Mangold, group finance director, said sales momentum was being helped by demand outstripping supply – “a fundamental of the sector for a very, very long time” – and historically low interest rates of 0.5 per cent since 2009 in the aftermath of the financial crash.

Mangold said it was “probably fair” to infer that Scottish house prices had not jumped as vigorously as down south because both boom and bust housing cycles tended to be less pronounced here.

Taylor Wimpey declared a final dividend of 1.18p for the year, taking the total for 2015 to 1.67p (1.56p). On future special dividends, the company said: “The board expects surplus cash returns to continue to form a significant proportion of the annual total return to shareholders.

“These cash returns will be set annually, in line with the cash generation of the business.”

Mangold said Taylor Wimpey’s record profit margins partly reflected its high-quality landbank and that it was possible they would improve farther “into the low 20s”.

The group’s short-term landbank comprises 76,000 plots.

One analyst said: “It is a very sound performance all round from Wimpey, with the special dividends forming a bonus for investors.”