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LONDON -- Shares of Taylor Wimpey (LSE: TW ) rallied 2% to 96 pence this morning after the FTSE 250 mid cap revealed sales had been at the upper end of the company's expectations since the start of the year.
The housebuilder reported customer interest had experienced a 15% improvement before the announcement of the government's new "Help to Buy" scheme in April, and had seen further significant increases following the announcement.
Taylor Wimpey's order book grew 27% to 1.2 billion pounds, while the number of homes in the pipeline was 14% higher than last year at 7,355.
Chief executive Pete Redfern commented:
We have made a strong start to 2013. Against a background of positive sentiment toward the housing market, we have seen an increase in visitor levels and reservations, driven by improved customer confidence and helped in recent weeks by the Government's Budget announcements
This, together with the quality of our locations and the inherent value in our landbank, is enabling us to drive improvement across all of our key performance measures.
However, the company maintained its cautious economic outlook:
We do not forget, however, that the macro uncertainty which has characterised the last few years still remains and as such we retain a cautious approach, even given the more optimistic outlook. With our strategy in place, we expect to deliver significantly improved and more sustainable returns across the housing cycle
After rising more than 40% so far in 2013, the share price of Taylor Wimpey values the company at 3 billion pounds and 17 times expected earnings. The company is expected to hike its dividend by more than 60% this year, to 0.92 pence per share, which would offer a prospective dividend yield of around 1%.
Of course, whether the current valuation and the prospects of the U.K. housing industry combine to make Taylor Wimpey a buy is something only you can decide.
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