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Taylor Wimpey says 2020 oper profit to meet expectations

·2-min read
The spread of the coronavirus disease (COVID-19) in St Albans

(Reuters) - Britain's third-biggest homebuilder Taylor Wimpey on Thursday estimated annual operating profit in line with market expectations as demand rebounded towards the end of last year, and said it expects to hand out a final dividend for 2020.

The country's biggest housebuilder Barratt has resumed dividend payments, while Persimmon posted a 25% jump in its forward sales as increased website traffic, higher house prices and stamp duty breaks benefit the sector.

"Throughout 2020, we were encouraged by the continued resilience of the UK housing market, underpinned by low interest rates and strong customer demand, and despite the further lockdown in January 2021, interest levels remain good," the company said in a trading statement.

However, the boom in the housing market has started to fade, dampened by new lockdowns and the coming expiry of a temporary tax cut for buyers.

The company said total UK home completions, including joint ventures, slumped about 39% to 9,609 in 2020, primarily due to the impact on production capacity during the second quarter shutdown.

Shares of Taylor Wimpey, which has operations across the UK and Spain, were down 1.2% in early trade.

The High Wycombe-based company, which in June said it would resume dividend payments in 2021, added it ended 2020 with a total order book valued at 2.68 billion pounds, compared with 2.18 billion pounds a year ago.

It had reported operating profit of 850.5 million pounds ($1.16 billion) a year earlier, while the current company-compiled estimates for fiscal 2020 stood at 293 million pounds.

The company said it is focused on returning to an operating margin of 21%-22%, adding that it has not experienced any significant supply chain issues associated with Brexit.

($1 = 0.7336 pounds)

(Reporting by Aby Jose Koilparambil and Samantha Machado in Bengaluru; Editing by Shailesh Kuber)