Taylor Wimpey says UK housing market resilient despite Brexit uncertainties

Housebuilder Taylor Wimpey said the UK housing market remained resilient, despite the implications of Brexit being unclear. The company said trading during the second half of this year had been strong with high levels of customer confidence.

“Looking ahead, we remain confident that our business model and strategy focused on managing the business through the cycle positions us to perform well through all market conditions,” Taylor said in a trading statement.

“We continue to focus on delivering our enhanced medium term financial and quality objectives, embedding our customer service processes and driving improvement in operational discipline. We expect to deliver an improvement in operating profit margin in 2016 as previously guided, and a return on net operating assets of around 30%.”

The company added that it remained committed to the announced £450m total dividend payment to shareholders in 2017.

Taylor said the Spanish housing market remained positive throughout 2016. The order book stood at 342 homes as at 6 November 2016 compared with 258 a year earlier.

While the weak sterling exchange rate had impacted British buyers, a “diverse customer base” had helped to achieve a healthy sales rate.

“We anticipate that the Spanish business will deliver an improved operating performance in 2016,” Taylor said. In 2015 the unit made a £10m operating profit.

Taylor said it saw net cash at the end of 2016 to be around £360m, up from £223.3m at the end of 2015, subject to the timing of conditional land purchases, and after the payment of £356m of dividends to shareholders in 2016.

“Following the recent issue of the €100m private placement, which together with our £550m revolving credit facility provides us with adequate committed funding for our liquidity needs, we have prepaid our £100m term loan that was originally due to be repaid in installments by 2020. As a result, we expect to reduce our financing interest costs next year by at least £4m.”