Investors welcomed the latest comments from new homes developer Taylor Wimpey (TW.) on the strength of trading during the first four months of the year.
The firm pointed to a higher order book and higher operating margins thanks to sustained demand for new homes, lifting the shares 3.3% to 132.3p.
POSITIVE TRADING
The UK housing market is still healthy and is ‘underpinned by continued strong customer demand, low interest rates and good mortgage availability’ according to the company.
Even though interest rates have increased, customer appetite remains strong and the mortgage market is highly competitive with a wide range of low-cost fixed-rate mortgage offerings.
The firm’s total order book at mid-April stood at 10,957 homes with a market value of £2.97 billion, an increase of 5.8% on the same period last year.
House price growth is ‘healthy’, reflecting the strength of the market, and developers have had no problems so far passing on higher labour and material costs to customers.
CASH RETURNS
With the fire safety issue largely in the rear-view mirror thanks to £165 million of existing provisions and an additional £80 set aside under the government’s Pledge agreement, the firm is clear to maintain its dividend policy subject to approval at today general meeting.
A final dividend of 4.44p per share for the 2021 financial year is due to be paid on 13 May followed by a 4.44p interim 2022 dividend in November, in line with the promise to return 7.5% of net assets each year.
In addition, the firm is half-way through its programme to buy back £150 million of its own shares, so the total return this year is in the region of £300 million.
Since taking over as chief executive 15 years ago, Pete Redfern - who today stepped down to be replaced by Jennie Daly - has presided over the return of more than £2.9 billion to investors through dividends and share buybacks.
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