Taylor Wimpey sees rise in 2015 operating profit margin as order book strengthens

Housebuilder Taylor Wimpey said it expected to report a 2% rise in 2015 operating profit margin and a return on net operating assets of more than 25%.

In a trading statement for the year to date, the company said it had seen an “excellent summer selling season strengthen further in the autumn period”, underpinned by rising wages and access to a wider range of mortgages.

Sales rates for the year to date are ahead of last year at 0.76 per outlet per week against 0.66 last time. For the second half to date, sales rates are around 22% higher at 0.73.

“As we look forward, we are particularly pleased to see that the tighter lending requirements are helping to ensure that monthly payments remain affordable and sustainable, which contributes towards a healthy outlook for both homebuyers and homebuilders,“said chief executive Peter Redfern.

He added that Taylor Wimpey expected net cash at the end of 2015 to be around £220m, up from £112.8m, subject primarily to the timing of cash payments on conditional land purchases and after the payment of £308m of dividends to shareholders in 2015.

“We expect to make significant progress in 2015 towards our medium term target to convert an average of 65% of operating profit into operating cash flow for 2015 – 2017,” Redfern said.

“We are fully sold for our targeted 2015 completions and are building our order book for 2016 and beyond. As at 8 November 2015, we are around 27% forward sold for our expected 2016 private completions.”

Taylor's current total order book represents 8,546 homes against 7,814 in early November last year and and stands at a record £2.1bn, excluding joint ventures, up from £1.7bn.