Taylor Wimpey Share Discussion Threads

[skinny] 01/8/2012 07:15

Ongoing implementation of strategy delivers 50% increase in operating profit

Highlights


· Group operating margina increased to 11.1% (H1 2011: 8.2%)

· Group Return on Net Operating Assetsb increased to 11.6% (H1 2011: 7.2%)

· Tangible net asset value per sharec 58.0p (3 July 2011: 57.0p)

· Group operating profita increased by 50% to £100.9 million

· Group pre-exceptional profit before tax increased by 171% to £78.2 million

· Further significant improvement in UK operational performance:

o UK operating margin increased to 11.4% (H1 2011: 8.4%)

o Growth in completions to 5,083 (H1 2011: 4,707)

o Increased average selling price of £176k (H1 2011: £168k)

o 18% increase in the value of the private order book to £688 million

o 6,890 new plots approved for purchase (H1 2011: 5,289)

o Planning consents achieved on 1,565 plots from our strategic land portfolio

o Customer satisfaction increased to 91.8% (H1 2011: 89.5%)

o H1 Injury Incidence Rate of 259 per 100,000 employees and contractors (H1 2011: 231, FY 2011: 378)

· Interim dividend of 0.19 pence per share declared (H1 2011: nil)

· Repurchased a further £5.6 million of 10.375% Senior Notes due 2015

[shaws37] 30/7/2012 20:09

Appears peel hunt looking to load up on the cheap....


30 Jul Taylor Wimpey PLC TW. Peel Hunt Sell 44.97 45.56 - - Reiterates

[shaws37] 30/7/2012 17:42

Ima

I do much prefer tee dubs, especially after me being locked in for 2.5 yrs previously, i got to know her a bit better :)

I'm just waiting to see the results and how much it will drift during August.
TW is a great share for the back end of the year up to spring the following year :) Although i have to take into account we are basically debt free, pay a divi so it's a much better share than previous years so her movements could be much different from previous similar patterns.

[immokalee] 30/7/2012 17:29

Positive in yesterdays Mail on Sunday.

[imastu pidgitaswell] 30/7/2012 17:19

No, happy enough with this. BDEV are going ok, I would just rather stick with one in the sector and know it well.

This (and the sector) might be looking to go lower, being down when the FTSE puts on 70 points. Regardless, did not sell any of the buys from below 43, just thought it would be up today. Happy enough to hold at 45, results pending.

[shaws37] 30/7/2012 14:14

Ima, are you in BDEV ?

Im considering bdev too, they seem to be doing well.

[gbh2] 29/7/2012 17:55

Back in in time for results so hoping they're good this time around :))

[imastu pidgitaswell] 27/7/2012 21:13

I do love this share, for it's volatility and also its liquidity - some proper volumes can be bought and sold at or close to the bid/offer, and while I always miss the top and the bottom, good money can be made anyway, due to its volatility.

Mind you, after more than two years of being stranded from buying in the low 40s while it went on vacation to the low 20s (all the while with a tangible NAV of 57p+), before eventually arriving back in the 40s, it effing well owes me. A lot...

[cockneyrebel] 26/7/2012 13:44

A nice buy point imo:

[imastu pidgitaswell] 25/7/2012 08:39

Another piece of inspired timing...

At least the rate of plunge is declining now - added some more, in the usual fashion.

[imastu pidgitaswell] 23/7/2012 13:36

They're having a good go - breaking 45 - dangerous, but not that dangerous - I hope...

Added back some sales from last week at 47 and change just now.





Spanish to blame, not least Taylor Wimpey Espana...

[sequoia] 22/7/2012 00:05

or do you mean this version.

[imastu pidgitaswell] 15/7/2012 21:15

Shaws - no, banks and financial services are not for me. Had a ponder about Aviva, as it had fallen so far on no real news, but all the banks and insurers have a fundamental uncertainty about them in the current climate and will have for the foreseeable future.

The exposure of all of them to PIGS debt, and the interdependence with each other - even if they are not directly exposed themselves, they are exposed to other European banks who are, and the whole contagion thing multiplies.

Plus there's the current Libor thing which will cost them once the lawsuits land, there's probably other similar items to come out ( Libor took years) - all too much uncertainty and there's no need to take such exposure.

Edit - good example of the unexpected is HSBC and the Mexican drug money laundering - will cost them $1bn - not unmanageable, but symptomatic.

[cockneyrebel] 15/7/2012 12:44

"A combination of higher sales prices, higher volumes and higher margins all contribute to sharply higher profitability - but all the other builders are doing the same, and it is all 'known' to the market."

I'm not sure that's completely in the markrt imastu.

Firstly we've had a weak market where many punters are shunning stocks. Secondly, I'm not sure the market fully realises the effect of higher sales and margins.

The fact you can but PSN and BKG for basically what you're going to get in divi's over the next 5-7 years says they are undervalued imo. Just needs another builder or two to do what PSN and BKG have done and that will set the sector alight imo.

CR

[shaws37] 15/7/2012 11:01

From tradesmarter on FXD thread.






tradesmarter
14 Jul'12 - 20:04 - 1905 of 1908

TW.....my view is that 40p support may now be "history" and for now 45p should be viewed as the new support with 50p next target...a close below 45p would then see support from the rising trendline circa 42-43p only if that goes would 40p come into play...for now I'm bullish on the whole sector and buy the dips is my view

[shaws37] 15/7/2012 10:38

Ima, thanks for that.


Are you in Barcs aswell ? Just wondered your thoughts on them ?

[imastu pidgitaswell] 15/7/2012 10:01

I think I said at the time - it was in line, neither better nor worse than expected. A combination of higher sales prices, higher volumes and higher margins all contribute to sharply higher profitability - but all the other builders are doing the same, and it is all 'known' to the market.

I prefer to look at actual results, with hard numbers, than trading statements, as it is easier to crunch real numbers. We'll get them soon enough, but we won't get any surprised, I don't think. There was a beneficial deferred tax impact on net asset value, but partially offset by yet another pension top-up.

Fwiw, TW and the other builders are really (imho) getting their valuations from a function of tangible net asset value, rather than a multiple of earnings, or dividend yield - earnings are still stabilising from the trauma of 2008-09, after disposals, interest cost reratings, banking refinancings etc - but they're getting closer to stabilising, and 2012 will probably be a good indicator of ongoing profitability.

In TW's case, the NAV was 57p, but a very strong 57p, no intangibles, low debt and written down valuations, which were probably written down too low, hence the additions to NAV as they make sales.

So 45-50p for a growing NAV of 57p (probably close to 60p by end of 2012) - I'd say that's fair and that's more or less what I'm tracking - buying around or below 45, selling in high 40s, or as close to that as I can manage, taking account of emotion, panic and wider market movements. Remains a very good trading share, with volume and volatility on a regular basis - hope it stays range-bound...

[shaws37] 15/7/2012 09:49

Looking back over the last rns, it look very good and we will certainly find out on 1st August 12.


Ima - you're good with figures, are you happy with the last RNS ?






4 July 2012



Taylor Wimpey plc

Half year trading statement

Delivering further performance improvement



Taylor Wimpey is issuing the following update on trading ahead of its half year results for the period ended 1 July 2012, which will be announced on 1 August 2012.



Overview



Despite the continued uncertainty in the Euro-zone and global economy, the UK housing market has remained stable throughout the first half of 2012 and we will report improvements across all key financial metrics at our half year results.



These improvements are the result of the continuing implementation of our strategy, driven by a combination of: increasing the proportion of strategic land sites; improving returns from land purchases since the downturn; an ongoing tight focus on costs and value optimisation; and the increasing benefits from our new housetype range.



We continue to focus on the creation of medium to long term value for our shareholders, which we believe is best delivered through the core skills of strategic land management, targeted and well-timed land acquisition and providing our customers with high quality, desirable homes that are efficient to build. While we retain an overall cautious approach, maintaining tight control over the level of debt and exposure to land creditors, we continue to take advantage of selective opportunities to acquire land at attractive return levels.



In the short term, assuming that current stable UK housing market conditions continue, we expect to continue to achieve improved performance period on period and to deliver full year returns in 2012 that are ahead of our cost of capital and in line with our expectations. Should market conditions weaken, our high quality land portfolio, increased order book and strong balance sheet put us in a strong position.



Current trading



UK market conditions remain stable, with underlying pricing unchanged over the course of the first half of 2012. Mortgage lending continues to be restricted, although we have been encouraged by the introduction of a number of higher loan to value products since the start of the year, most notably under the NewBuy scheme.



We have maintained our strong sales performance during the first half of this year, achieving an average private net reservation rate of 0.60 sales per outlet per week (H1 2011: 0.56). This rate includes a total of 201 home reservations under the NewBuy scheme since its launch in March 2012, representing around one-third of overall industry reservations. We have increased our use of the government-backed FirstBuy scheme, although we retain our cautious approach to the use of shared equity incentives in general. Cancellation rates remain below the long term average at 15.1% (H1 2011: 15.1%).



We completed a total of 5,083 homes during the first half of 2012 (H1 2011: 4,707), of which 4,137 were private completions (H1 2011: 3,675), 893 were affordable completions (H1 2011: 1,004) and 53 were our share of joint venture completions (H1 2011: 28). The overall average selling price of these completions increased to circa £175k (H1 2011: £168k). The average selling price on private completions increased to circa £188k, reflecting a higher quality product mix in terms of both size and location (H1 2011: £182k). The average selling price on affordable completions decreased to circa £115k (H1 2011: £117k).



Having completed the roll-out of our new housetype range during 2011, the benefits to the business are increasing as they are plotted on a growing number of sites. These homes, which are designed to be high quality, desirable, extremely energy efficient, cost effective and safe to build, have been well received by our customers.



As previously announced, following the disposal of our North American business, the Group will no longer be reporting a 'Corporate' segment in our financial statements, with the former 'Corporate' overheads now being accounted for within the UK Housing segment. We expect to report an operating margin for the first half of approximately 11% (H1 2011 restated: 8.4%).



Our continuing prioritisation of margin improvement ahead of volume growth is also reflected within our order book, where we have achieved additional margin progression since the year end. The total order book value, excluding completions to date and joint ventures, was £960 million at 1 July 2012 (3 July 2011: £932 million), representing 5,720 homes (3 July 2011: 5,989 homes). This growth in the value of the order book has been driven by private reservations, with an 18% increase in the value of the private order book more than offsetting a decline in the value of the affordable order book.



Land portfolio, planning and outlets



We maintain our consistent, disciplined approach to land acquisition and we have approved the purchase of circa 7,000 plots during the period on approximately 50 sites. We also continue to enhance the quality of our strategic land portfolio, both by the progression of existing sites through the planning process and by the targeted addition of new potential plots.



We aim to become the industry leader in managing the planning process across our business and we have been encouraged by the early successes that we have achieved as we adapt to the recent changes in the planning system.



Our primary goals with new outlets continue to be to optimise planning consents and to value-engineer sites prior to opening. We are currently operating from 314 outlets (3 July 2011: 310).



Spain



Market conditions have continued to be challenging in Spain during the first half of this year, particularly in respect of local buyers, given the ongoing economic uncertainty. We completed 13 homes in Spain during the first half of 2012 (H1 2011: 30) at an average selling price of £172k (H1 2011: £266k). The order book value was £20 million at 1 July 2012, (3 July 2011: £17 million), representing 97 homes (3 July 2011: 75 homes).



Group financial position



Our balance sheet remains strong, with net debt below £150 million as at 1 July 2012. Since the start of the year, we have repurchased a further £5.6 million of the 10.375% Senior Notes due 2015, with £159 million remaining outstanding at 1 July 2012.



Following the recommencement of the dividend at the 2011 full year results, the Group intends to pay an interim dividend. In line with the policy outlined at that time, this interim dividend will be calculated with reference to the net asset value of the Group and is expected to represent around one-third of the total dividend for the year.



Following the favourable resolution of an historic potential tax liability, the associated provision has been released in the first half. This results in an exceptional tax credit of £59.6 million and an exceptional interest credit of £23.0 million to the income statement in the period. The associated enhancement to the net asset value of the Group is expected to be partially offset by an increase in the IAS19 pension deficit.



Outlook



Trading in recent weeks has continued to be stable, in spite of the ongoing uncertainty in the wider economy. Assuming that current stable market conditions persist, we expect to continue to achieve improved performance period on period and to deliver full year returns in 2012 that are in line with our expectations.

[shaws37] 15/7/2012 08:18

Will we see new highs for tee dubs this year ?

[sequoia] 13/7/2012 20:48

Don`t expect 95 % mortgages for the young,as that wont happen.
What will sell will be,homes for those that want to downgrade from 350k to 250k,2 bed homes or even bungalows, with manageable gardens.

[imastu pidgitaswell] 13/7/2012 09:19

Hmmmm - sluggish, at best.

Bit of a gap to fill against PSN, or the start of a divergence?