FTSE 100 housebuilder says brexit impact is unclear
Companies: Taylor Wimpey plc
UK housing giant Taylor Wimpey (LSE: TW.) released an upbeat trading update this morning saying performance had been stable across its regions in H2 with demand high and resilient, but confirming that the impact of the EU referendum still remained unclear.
The FTSE 100 housebuilder said trading was stable across its core regions, with London remaining "positive" and in line with the rest of the UK. It confirmed that the central London market did slow during 2016, with prices softening in zones 1 and 2 and at the premium end of the market, but said that demand remained high.
Speaking about the economic climate, the company said trading had remained positive in H2, with a high level of customer confidence. The competitive mortgage environment had underpinned performance, with the wide choices available encouraging buyers.
The EU Referendum impact is still unclear, but it appears the UK housing market has remained resilient. The group says long-term fundamentals were underpinned by strong demand:
"Looking ahead, we remain confident that our business model and strategy focused on managing the business through the cycle positions us to perform well through all market conditions."
With the operating profit margin expected to improve on the 20.3% in 2015:
"We expect to deliver an improvement in operating profit* margin in 2016 (FY 2015: 20.3%), as previously guided, and a return on net operating assets** of around 30%. We remain committed to the announced £450 million total dividend payment to shareholders in 2017."
CEO Pete Redfern, said trading in the autumn season had been strong, with encouraging levels of customer confidence and demand:
"While there remains some uncertainty following the UK's vote to leave the European Union, we are encouraged to see that the housing market has remained robust and trading has remained resilient. We have a strong order book position for 2016 and going into 2017, and we will maintain our focus on delivering our medium term targets.
Looking ahead, we continue to implement our disciplined strategy which ensures that we are well placed to perform well through all market conditions and deliver enhanced value through the cycle."
TW's share price opened up 4% in early trading.