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UK's Taylor Wimpey enjoys strong demand, plans share buyback

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By Reuters
UK's Taylor Wimpey sees robust demand in housing market
UK's Taylor Wimpey sees robust demand in housing market   -   Copyright  Thomson Reuters 2022

By Aby Jose Koilparambil

-Taylor Wimpey, the UK’s third-largest housebuilder, on Monday joined bigger rival Persimmon in highlighting sustained demand in the housing market, and said it was planning to buy back shares.

Cheap loans and a pandemic-driven preference for larger homes among buyers have helped housebuilders project a brighter outlook, while pushing house prices to record highs and helping cushion the impact of higher building costs.

FTSE 100-listed Taylor Wimpey said it expects annual financial results in line with its expectations and has a strong order book for 2022. Its shares rose nearly 2% in morning trade.

The High Wycombe, England-based firm, which also has a presence in Spain, said total UK home completions surged 47% to 14,087 units in 2021.

The company said it was in talks with building owners to undertake cladding-related work at some properties. Shares in UK homebuilders plunged last week when Britain ordered firms to pay around $5.4 billion to help remove dangerous cladding from buildings.

“Whether these results can result in a sustained share price recovery for Taylor Wimpey, which suffered a sharp sell-off after the cladding announcement, will depend on whether it can continue to offset rising costs and maintain demand,” said Adam Vettese, an analyst at investment platform eToro.

Taylor Wimpey, which has been more active than other housebuilders in buying land during the pandemic, said it would reveal how much it made in returns for 2021 in March.

The company added that its intention was to return excess cash to shareholders through a share buyback.

Britain’s No. 2 homebuilder Persimmon last week forecast higher profit margins for fiscal 2021, while smaller firms MJ Gleeson and Vistry reported healthy trading on robust demand. Countryside Properties unexpectedly reported a weak quarter.

($1 = 0.7314 pounds)