Taylor Wimpey says it’s “well equipped” to handle Brexit uncertainty as order book fills up
The boss of one the UK's largest housebuilders, Taylor Wimpey, has shrugged off concerns surrounding the EU referendum, claiming that it is "well equipped" to react to any changes in the market and that uncertainty in the run-up to the vote has had no effect on trading.
Speaking at the company's annual general meeting this morning, Pete Redfern said the group had performed well in the first four months of the year, with a 14 per cent jump in customer demand for its homes together with good access to mortgages helping to drive strong sales rates.
The average private net reservation rate increased to 0.80 sales per outlet per week compared with 0.76 in the same period last year and cancellation rates remained low at 11 per cent.
The developer said it was now around 70 per cent sold for 2016 with a forward order book consisting of 8,811 homes with a value of around £2.2bn, up 16.6 per cent on the same time last year.
Whereas other developers have been quick to warn of the impact the uncertainty surrounding the EU referendum vote could have on trading, Redfern thinks otherwise, insisting that that underlying demand remains solid across all of our geographies.
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"Due to our customer base and supply chain being based principally in the UK, together with our strong order book, we are well equipped to react to any potential changes in the market that may be caused by the EU referendum," he said.
Taylor Wimpey's share price was stable this morning, up just 0.6 per cent at 188.3p. Liberum analyst Charlie Campbell, who has a "sell" rating on the stock, said its shares were now looking too expensive compared to the rest of the sector given that returns are likely to peak in the near term.
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He also noted that the pace of order intake was flat on last year, having been well up at the start of the year.
However Jefferies analyst Anthony Codling, who has a "buy" rating on the stock, was more upbeat: "The Brexit debate does not appear to be occupying the minds of new build homebuyers. Perhaps their minds are dulled by the drug named Help to Buy or maybe as our homes are our castles they insulate us from the pros and cons either 'Bremain' or 'Brexit'.
"In our view, with an order book lasting longer than the uncertainty surrounding the outcome of the EU referendum Taylor Wimpey is a good place set up home whilst the nation decides 'in' or 'out'."
At the end of March the company had a strategic land pipeline of around 105,000 potential plots, and a short term pipeline of 78,000 plots.The trading update also comes three days after Taylor Wimpey struck a major deal to buy 500 plots of land at Ebbsfleet Garden City from Land Securities.