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Taylor Wimpey may be back on track in part thanks to Government support, experts said, as the company revealed housing demand had been “resilient”.
The firm told investors they could expect an interim dividend in November, on top of the payout they will get next month.
It sold one house for every site in the year to April 18, compared with just 0.9 in the 12 months before, while prices also went up at the end of last year.
“2020 marked just the second time in the past decade that Taylor Wimpey had seen a decline in profits,” said Freetrade analyst David Kimberley.
“But there are positive signs the firm is on the path back to winning ways. A £2.8 billion order book, growing demand and increasing house prices all look to be working in the group’s favour.”
The company has also been snapping up land, which has at times proven cheaper over the past year.
A year ago Taylor Wimpey had 78,000 plots in its short-term landbank. It now owns around 82,000.
Hargreaves Lansdown equity analyst Laura Hoy said: “While many of its peers chose to tighten their purse strings, the group made the bold choice to spend on new land during the pandemic.
“If things carry on as they are, the cheap land purchases will bring the group one step closer to its goal to deliver margins over 21%.”
But potential concerns remain on the horizon. Some of the “resilient” customer demand in the first few months of 2021 has been propped up by Government support.
Last year Chancellor Rishi Sunak removed stamp duty on some property sales to help the sector through the pandemic.
“Sunak and Co have done all they can to keep prices and purchases up during the past 12 months,” Mr Kimberley said.
“Taylor Wimpey may be looking anxiously towards the end of furlough and the stamp duty holiday. When those and other bits of support come to a close, it may make things tougher for the housing sector all round.”
Chief executive Pete Redfern said: “The UK housing market continues to be resilient and we are trading in line with our full year expectations. With strong market fundamentals, customer demand for our high-quality homes remains robust and we are achieving a strong sales rate and building a healthy forward order book.”