Taylor Wimpey’s order book shrinks amid ‘value over volume’ approach
Housebuilder Taylor Wimpey has reported a smaller order book and fewer sales this year amid “market uncertainty and affordability challenges” as it looks to grow in 2025.
The FTSE 100 firm said in a trading update on Tuesday that its total order book value stood at £2.09bn on 21 April 2024, which represented 7,686 homes. This figure was down from £2.38bn and 8,576 homes in the previous year.
Taylor Wimpey added that its net private sales rate for the year to 21 April 2024 was 0.73 per outlet per week, down from 0.75 in 2023. Excluding bulk sales, this figure came in higher at 0.69 from 0.66.
The firm said it remained: “Focused on prioritising value over volume, building a strong order book and positioning ourselves for growth from 2025, assuming supportive market conditions”.
High mortgage rates have hit demand for new homes in recent times, while inflation and labour shortages have pushed up costs for builders. Taylor Wimpey’s pretax profit sank by 42.8 per cent to £474m last year.
The firm echoed its previous guidance that its first-half operating profit margin would reflect “slightly lower” pricing in its order book and roughly four per cent build cost inflation embedded in work in progress.
Taylor Wimpey said it continued to guide for between 9,500 and 10,000 completions in 2024, which, if achieved, would be below the 10,848 it finished last year and the total of 14,154 completed in 2022.
At the end of March, its short-term landbank stood at approximately 81,000 plots, down from roughly 86,000 a year prior. It has around 140,000 plots in its strategic pipeline.
Chief executive Jennie Daly said: “While we are mindful of ongoing market uncertainty and affordability challenges, it is pleasing to see continued market stability supported by good mortgage availability and sustained customer confidence.”
She added: “Looking ahead, we are confident that we have a strong and resilient business supported by a high-quality, well-located landbank. We remain focused on driving value and investing in the long term sustainability of the business, and we remain on track to deliver our guidance for 2024 while ensuring we are positioned for growth from 2025, assuming supportive market conditions.”
The update comes ahead of the company’s annual meeting later this morning.