Taylor Wimpey shares stumble on weather hit
Wintry conditions in March had a ‘noticeable impact’ on sales.
Shares in Taylor Wimpey dipped after the housebuilder reported a slowdown in sales and build rates, which were partly affected by extreme weather in March.
In a trading update covering the first four months of the year, the group said the value of its order book fell 2.5% to £2.16 billion.
It also saw the number of homes on the order book fall from with 9,219 to 9,050.
“During the first few weeks of March, the poor weather conditions had a noticeable impact on sales and build rates but activity has since recovered,” Taylor Wimpey said.
Average private sales for the year to date were 0.85 per outlet per week, down from 0.93 but in line with the firm’s expectations.
Shares were down more than 3% in morning trading.
Nevertheless, the group described the underlying housing market as “stable”, with good accessibility to mortgages for buyers at competitive rates.
The company also expects completions for 2018 to be weighted towards the second half of the year.
Boss Pete Redfern said: “We have continued to see good demand for new housing through early 2018.
“Looking ahead, as we embark on the next stage of our strategy, our focus is on building our capability to deliver great quality homes and places for our customers over the long term.”
Trading through the spring selling season has been good and customer demand for housing continues to be strong, Taylor Wimpey said, with low interest rates and high employment propping up the market.
In February, Taylor Wimpey’s full-year figures were dented after having to fork out £130 million because of a leasehold scandal, but the firm said it is on track to meet expectations in 2018.
George Salmon, equity analyst at Hargreaves Lansdown, said: “Taylor Wimpey says the weather impacted sales in the early part of the year, although we can’t help but notice fellow builder Persimmon delivered strong numbers just 24 hours before this update, and didn’t mention any such headwinds from the cold snap.
“Having said that, there’s not too much wrong with what Taylor Wimpey has reported. Sales rates are still high by historic standards, and cancellations remain rare. The group is confident of hitting targets for the year, despite the hiccup from the poor weather.
“In the short term at least, the presence of government support, combined with high employment levels and low interest rates, means there are plenty of reasons for its optimism.”