Landlord Insurance Rent Guarantee | Taylor Wimpey optimistic about improvement in UK housing market
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Housebuilder reports more than doubled full year profits and says 2013 has got off to a good start
Taylor Wimpey has echoed upbeat comments on the UK housing market made earlier this week by rivals Persimmon and Bovis.Landlord Insurance Rent Guarantee
Announcing more than doubled full year profits of £185.3m, Taylor said it was cautiously optimistic about the outlook. It completed 10,886 homes at an average selling price of £181,000, up from £171,00 in 2011. Chief executive Pete Redfern said in a statement:
We believe mortgage availability will remain the key constraint on the market, although we have seen improvement over the last few months and hope that this will continue. This combined with a tentative improvement in consumer confidence, gives us grounds for cautious optimism in the short term.
He later added, as reported by Reuters:Landlord Insurance Rent Guarantee
It’s definitely a more positive start to the year than we have seen in the last two to three years.
Landlord Insurance Rent Guarantee
The company’s shares have edged up 0.8p to 81.9p following the figures. Analyst Anthony Codling at Jefferies said:
We hope that today’s results will silence the remaining critics of the margin growth story, where growth is driven by new land. Our estimates continue to be based on stable market conditions, were however, an inflexion point to be reached (a significant increase in mortgage approvals) in our view Taylor Wimpey is among the best placed to benefit from any cyclical recovery. We also believe that the fact that it continues to invest in the results of tomorrow rather than cash returns today make it an ideal fit for those wishing to play a longer run recovery in the UK housing market.
Rachael Applegate at Panmure Gordon was also positive on the results, but less so on the shares:
These are excellent results from Taylor Wimpey, and it is great to see a management team turn a business around to such an extent already. However, the share price is 81p and the net asset value is 61.5p, so in our opinion, from
a valuation perspective this doesn’t make sense. Therefore we have a sell/trading sell on the stock [with a target price of 68p].
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