Taylor Wimpey's H1 profits drop 21% as costs rise, pricing falls

UK housebuilder Taylor Wimpey saw profits fall by more than a fifth in the first half as residual build cost inflation and weaker pricing hit margins, but said it now expects full-year completions to be at the top end of guidance after a solid operational performance.

Adjusted pre-tax profit slumped 21% year-on-year to £187.7m, with the operating profit margin falling 2.4 percentage points to 12.0%.

Revenues were 7% lower at £1.52bn as the company completed 4,728 homes, down from 5,120 in the first half last year, while the average selling price slipped 0.9% to. £317,000.

Taylor Wimpey ended the half with an order book of 7,451 homes at a value of £2.01bn, compared with 7,866 and £2.15bn the year before, respectively.

"Looking to the second half, our performance to date means we now expect to deliver 2024 full year UK completions towards the upper end of our previous guidance range of 9,500 to 10,000," said chief executive Jennie Daly.

The negative impact of residual build cost inflation and weaker pricing should reduce in the second half, while the recovery of fixed costs will improve as volumes increase, meaning that underlying margins should pick up.

As such, Daly also said the company still expects to hit market expectations for operating profit over the full year, which currently stand at £416m, down from £470.2m in 2023.