LONDON -- Taylor Wimpey (LSE: TW.L ) , the homebuilding company with residential developments in the U.K. and Spain, saw its share price boosted 2.5% to 45.3 pence on the back of encouraging results for the six months to July 1.
Group operating profit increased by 50% to 100.9 million pounds, with pre-exceptional profit before tax increasing by 171% to 78.2 million pounds. This profit has been achieved by selling more properties and at a higher margin, which has increased from 2011's 8.2% to 11.1%, with the average selling price of its properties up 4.8% to 176,000 pounds and completions up 8% to 5,083.
The homebuilding sector is fighting the general malaise in demand for property, and investors can be pleased that Taylor Wimpey is performing strongly alongside the likes of Barratt, Bellway, Persimmon, and Bovis.
The company has focused on obtaining customers in this uncertain market with initiatives such as the NewBuy and the government-backed FirstBuy scheme. Part-exchange is also offered on many properties, although Taylor Wimpey is selective regarding the properties it will take, and it generally will offer a significant discount on the property offered up for exchange. Additionally, appealing incentives like cash discounts and free optional extras are offered to entice potential purchasers.
Additionally, customer satisfaction has increased from 89.5% in 2011 to 91.8%, which underlines the five-star rating the company received in the Home Builders Federation's survey.
Looking forward, 6,890 new plots have been approved for purchase -- an increase of 30% -- and planning consents have been achieved on 1,565 plots.
An interim dividend was announced of 0.19 pence per share from the cash reserves of 123.8 million pounds.
Pete Redfern, chief executive, said:
I am very pleased to report another period of strong financial and operating performance. We've seen improvements across the business driven by our continued focus on prioritising margin growth and return on capital.
Although wider economic conditions remain uncertain, we have been reassured by the continued stability in trading conditions and the strength of our order book.
Looking ahead, we expect to deliver further improvements in performance across all key metrics.
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