Taylor Wimpey lowers full-year completions forecast after drop in sales in first half

Taylor Wimpey has narrowed its range of expected completions this year after a drop in sales in the first half.

The housebuilder said it completed 4,986 homes in the six months to 28 June, down slightly on the 5,264 reported for the same period a year ago.

The group’s net private sales rate per outlet per week dipped from 0.79 to 0.75 over the same period. The housebuilder said it now expects to complete between 10,600 and 10,800 in the year, down slightly on the 10,600 to 11,000 range previously stated.

It said: “Reflecting the lower first half sales rate and ongoing market backdrop, we expect UK completions excluding joint ventures for the full year to be between 10,600 and 10,800 homes, within the lower half of the range provided in March. “

The group’s turnover in the first half increased by 1.7% to £1.68bn. It also moved back into pre-tax profit, with a figure of £116.8m, compared to a loss of £92.1m in the previous year when it was hit by £222m of cladding costs. Taylor Wimpey’s pre-tax profit excluding exceptional items, however, fell from £148.1m to £118.6m.

Taylor Wimpey also cut its annual shareholder payout policy from its previous level of 7.5% to 4% of net assets. It said has done this to “preserve balance sheet strength [and] retain financial flexibility” as the downturn has “reduced expected profitability and cash generation”.

The housebuilder said it expects conditions to remain challenging for the rest of the year, with underlying pricing below prior year levels and build cost inflation of around 3-4%.

A spokesperson said: “We continue to support the Government’s housing ambition. However, without targeted demand support and viability measures to unlock delivery, weaker demand, rising costs and limited affordable housing funding risks reducing sector output and UK economic growth.”