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Taylor Wimpey raises profit view as UK housing demand stays strong

UK's Taylor Wimpey raises annual outlook, swings to H1 profit
UK's Taylor Wimpey raises annual outlook, swings to H1 profit   -   Copyright  Thomson Reuters 2021
By Reuters

-UK homebuilder Taylor Wimpey Plc on Wednesday raised its full-year earnings outlook, joining bigger rivals in projecting sustained demand, as Britain’s housing boom stands to outlast the tax holiday period.

Cheap loans and a pandemic-driven preference for larger houses from buyers who saved up during lockdowns have also helped homebuilders forecast a brighter outlook and driven up prices, although a survey last month pointed to a cooling in market activity.

Britain’s third-largest homebuilder forecast 2021 operating profit of about 820 million pounds ($1.14 billion), above the top end of a company-compiled consensus range of 756 million-808 million pounds.

“Our focus remains on driving further improvement in our operating profit margin and accelerated outlet-driven volume growth from 2023,” said Chief Executive Peter Redfern.

The High Wycombe-based firm, which also has a small presence in Spain, said its first-half UK order book representing 10,344 homes stood at 2.61 billion pounds, below 2.90 billion pounds for 11,686 homes a year earlier.

Pre-tax profit for the six months ended July 4 came in at 287.5 million pounds, compared to a loss of 39.8 million pounds in the pandemic-hit period a year earlier.

The FTSE 100 firm, which has been more active than its peers in the land market over the past year, said half-year revenue almost tripled to 2.20 billion pounds and announced an interim dividend of 4.14 pence per share.

Leading British homebuilders Barratt Developments and Persimmon last month forecast robust housing demand even after a tax holiday on property purchases ends in September.

($1 = 0.7182 pounds)