Taylor Wimpey profits drop due to higher costs
Shares in house builder Taylor Wimpey fell more than six per cent this morning as the company reported a drop in profits due to higher costs.
The figures
Profit before tax and exceptional items fell 9.4 per cent in the first half of the year to £299.8m from £331m in 2018.
Read more: Taylor Wimpey shares dip as costs weigh on property giant
In the six months to 30 June, revenue rose slightly from £1.72bn to £1.73bn.
Earnings per share fell 9.8 per cent from 8.2p to 7.4p and net cash dropped 25.3 per cent from £525.1m to £392m.
Why it’s interesting
In the first half of 2019 build cost per unit increased to £152.500, from £143.700. “There continues to be pressure on labour and materials, reflecting wider industry trends,” the company said in its half-year results announcement this morning.
Taylor Wimpey said the UK housing market was generally stable and showed robust demand, however, trading in south east England was “more challenging” at higher price points.
The company said the uncertainty caused by the UK’s exit from the EU has not sparked any change in customer confidence or sentiment.
What Taylor Wimpey said
Pete Redfern, Taylor Wimpey chief executive, said: “We have made good progress in the first half against our long term strategy, underpinned by our continued commitment to our customers, build quality and employee engagement.
“We delivered a record sales rate in the first half as we saw strong customer demand for our homes in a stable market and the success of our strategy to build more homes on our larger sites coming through more quickly than anticipated.
Read more: Taylor Wimpey maintains expectations despite uncertainty
“Despite wider political uncertainty, conditions for the housing market continue to be supportive with good affordability and access to finance.
“We have not seen any meaningful change in customer confidence, with positive underlying metrics and forward indicators. We expect full year results for 2019 to be in line with expectations.”