Taylor Wimpey: challenges ahead
Taylor Wimpey issued its full-year trading update this morning
What Taylor Wimpey said
Despite the economic and political backdrop through the second half, full-year results will be in-line with expectations
Forward order book down 24% to £1,941 million
The Group expects volumes (the number of homes sold) to reduce in 2023
Taylor Wimpey's trading update comes hot off the heels of trading updates from Barratt Developments and Persimmon and strikes a similar tone: 2022 was characterised by a robust first half, followed by a challenging second half and whilst the long-term fundamentals for the UK housing market remain compelling it is too early to say when or if the market will recover in 2023.
Taylor Wimpey's trading update disclosed fewer numbers than its peers, but the messaging was similar: since the rise in mortgage rates in Q3 2022 sales rates have been significantly lower.
Whilst the market conditions are uncertain spending on land has been reduced, work in progress is under very tight control and a plan to generate annualised cost savings of around £20 million is being discussed.
Taylor Wimpey enters a challenging 2023 from a position of strength with a long and deep landbank and cash on the Balance Sheet, a much stronger position than it had ahead of the Global Financial Crisis. The Group can therefore focus on long-term shareholder value whilst it navigates the current choppy market conditions.