Taylor Wimpey’s full-year revenue fell 3.2% to £3.4bn, as an uptick in sales rates was more than offset by lower average selling prices
Operating profit fell 11.5% to £416mn, in line with market expectations. The decline reflects the lower selling prices and increased building costs.
The group completed a total of 9,972 new homes in the UK in 2024 (excluding joint ventures), down slightly from 10,356 in the prior year. At 23 February 2025, the order book stood at £2.3bn (2024: £1.9bn).
Free cash flow improved from £123mn to £162mn. The net cash position fell from £0.7bn to £0.6bn at year-end.
In 2025, full-year completions are expected to be in the 10,400-10,800 range, weighted slightly towards the second half. Build cost inflation is expected to be in the low single digits.
A final dividend of 4.66p per share has been announced, taking the full-year total to 9.46p (2023: 9.58p).
The shares were broadly flat in early trading.
Our view
Taylor Wimpey’s full-year results were largely as expected after last month’s update. Trading in the new year has been positive, with the group seeing good levels of demand for its homes. That’s helped grow the order book, improving the group’s revenue visibility.
With UK inflation looking largely under control, there’s cautious optimism that rates will creep lower this year. Falling rates are a tailwind for buyers, increasing their purchasing power. A potential homebuyer with a £1500 monthly mortgage budget has over 10% more borrowing capability at 4.0% than 5.0%.
The landbank is a particular strength for Taylor Wimpey, which has a significant number of plots awaiting detailed planning permission. If the new government delivers on its promise to ease planning permission, more supply is likely to come online, and Taylor Wimpey should start to see the benefit.
The balance sheet is in great shape too, arguably one of the strongest in the sector. That provides plenty of cover for the generous prospective dividend yield of 8.4%. But remember, dividend policies can change on a dime. No dividends are guaranteed.
The current dividend policy is linked to asset value rather than earnings. That means investors are more likely to receive a base level of dividend even in a downturn. Given the improving outlook, we’d be keen to see this policy changed to favour a more even split between dividends and share buybacks. This would likely bring more value to shareholders given the group’s trading some way below book value.
Regardless, there are still challenges to navigate.
The sector's facing ongoing labour and supply chain challenges. That’s starting to move build cost inflation on an upward course again, which could put pressure on margins. There’s also the weakness of pricing in the South. With rates proving fairly sticky, buyers in this region are likely to remain hesitant to sign the dotted line on a new home.
There’s still plenty of uncertainty ahead, with margins likely to remain under pressure in the near term. But there are growing signs of improved buyer activity, and with a longer-term lens, the valuation remains attractive. Given its robust financial position and a strong pipeline of land, Taylor Wimpey looks in as strong a position as it could be for now.
Environmental, social and governance (ESG) risk
Most housebuilders are relatively low risk in terms of ESG, particularly for those in Europe. However, there are some environmental risks to consider, from direct emissions to the impact of their buildings on the local ecology. The quality and safety of their buildings is also a key risk.
According to Sustainalytics, Taylor Wimpey’s management of ESG risk is strong.
The group has a strong greenhouse gas reduction programme in place and reports on scope 1, 2 & 3 emissions. There are clear deadlines in place and a renewable energy programme has also been implemented. While the group uses recycled materials, there’s no disclosure of the percentage used.
Taylor Wimpey key facts
All ratios are sourced from Refinitiv, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
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