Taylor Wimpey shares soar on profit upgrade

Shares in Taylor Wimpey rocketed this morning after the firm said it expected results for next year to be better than expected following the strong recovery from the spring lockdown.

Shares rose more than 12% in early trading after chief executive Pete Redfern (pictured, left) said in a trading update he expected full year results for 2020 at the upper end of expectations, and operating profit in 2021 “materially above” what analysts are expecting.

In July £4.3bn-turnover Taylor Wimpey reported a £40m half-year loss for the six months to June, and said it expected completions for the year as a whole – which runs to the end of December – to be 40% down on the 16,000 built in 2019 in the wake of the covid crisis.

However, today Redfern said: “The trading backdrop remains resilient and the quick recovery of the housing market is testament to the underlying strength of demand and supportive lending backdrop.

“We have made good progress in the second half of the year to date, maintaining a robust sales rate and building a strong forward order book.”

Redfern added that sales had been supported by chancellor Rishi Sunak’s temporary stamp duty holiday and the extension of the current version of the Help to Buy scheme.

The announcement from Taylor Wimpey comes less than a week after Crest Nicholson said in a trading update that it expected 2020 profit to beat expectations, and after the Halifax reported the fastest rise in house prices since 2006 over the last four months.

It also comes after confirmation from government that housebuilders will be able to trade unaffected by the new lock measures which came in to force last Thursday, with construction sites and showrooms all to remain open, as in recent months, where they are “covid secure”.

Taylor Wimpey said this confirmation “has enabled us to keep our construction sites fully open, continue to hold customer appointments in our sales centres and show homes, and progress customer service work in customers’ homes, in a responsible manner.”

The firm said “early signs” from trading during the latest lockdown suggested that customers wished to continue to progress purchases, and that forward sales indicators remained at “healthy” levels.

The firm said it had achieved 0.76 sales per site per week in the second half of the year so far, down from the 0.93 sales rate seen in the same period last year, but up on the 0.73 registered in the first half.

It said its order book had risen to 11,530, compared to 10,486 at the same time last year, with a value of £3bn.

In addition it said its construction operations had returned to “at or near normal construction pace” and that it was already selling for Q2 2021 and beyond, and had opened 56 outlets in the year to date.