- Profit impacted by charges
- Interim dividend lowered
- Shares near two-year low
Shares in Taylor Wimpey (TW.) fell 5p or 5% to 102p, close to a two-year low, after the housebuilder posted disappointing half-year results.
Pre-tax earnings swung to a £92 million loss from a profit of almost £100 million last year due to a series of one-off costs for fire cladding provisions, a CMA (Competition and Markets Authority) investigation settlement and historical contractor issues.
The firm also announced an interim dividend of 4.67p per share against 4.8p this time last year.
FULL YEAR GUIDANCE HELD
On a positive note, however the housebuilder said trading in the first quarter was robust and it reiterated its guidance for full-year UK completions of between 10,400 to 10,800.
The housebuilder added group operating profit for 2025 was now expected to be ‘circa £424 million, impacted by a one-off charge, unchanged on an underlying basis.’
BUILD COST INFLATION AN ISSUE
Russ Mould, investment director at AJ Bell said: ‘Taylor Wimpey is the latest to disappoint the market, with half-year earnings going up in smoke thanks to a series of one-off factors. Charges linked to fire safety and a settlement linked to a competition watchdog investigation have led Taylor Wimpey to move from a profit to a loss.
‘Even without those factors, life is still an uphill battle. Average selling prices fell in the first-half and recent trading has seen a decline in its net private sales rate.
‘Build cost inflation is still an issue, yet Taylor Wimpey is confident of lifting its operating profit margins. Investors aren’t buying this optimism given the 5% slump in its share price on the news, putting the stock at its lowest level in two years.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.
