# Taylor Wimpey expects full-year profits to halve amid housing gloom Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-08-02 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Taylor Wimpey's Positive Building Pledge Amid Housing Meta Description: Taylor Wimpey's plan to build more homes drives shares up, despite profit drop due to market stress and high costs. Order book and cancellation rate also URL: https://financedigest.com/taylor-wimpey-expects-full-year-profits-to-halve-amid-housing-gloomhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-08-02t062254z1lynxmpej7106hrtroptp4taylor-wimpey-results-1736813701097-compressed.jpg) # Taylor Wimpey expects full-year profits to halve amid housing gloom By Suban Abdulla and Aby Jose Koilparambil LONDON (Reuters) -Taylor Wimpey’s pledge to build more homes than previously forecast boosted the British housebuilder’s shares on Wednesday even though it expects annual operating profits to halve in its current year amid wider housing market stress. Britain’s housing market has recorded a drop in house prices and softer buyer demand after the Bank of England sought to tame stubborn inflation by hiking interest rates. But unlike its bigger rival Barratt Developments, Taylor Wimpey, Britain’s third largest housebuilder by [market value](https://www.financedigest.com/analgesics-market-value-surpasses-us-77-3-bn-as-demand-for-nsaids-rise-at-4-1-fmi.html "Analgesics Market Value Surpasses US$ 77.3 Bn as Demand for NSAID’s Rise at 4.1%: FMI"), said it would not reduce the number of houses it plans to build this year, despite higher costs and wary buyers weighing on profitability. The group said it planned to build 10,000 to 10,500 homes in the current financial year, compared with the 9,000-10,500 [units forecast](https://www.financedigest.com/vapour-recovery-units-market-is-expected-to-register-a-decent-cagr-of-more-than-5-during-the-forecast-period-of-2019-2029.html "Vapour Recovery Units Market is expected to register a decent CAGR of more than 5% during the forecast period of 2019-2029") in March and 14,154 built in 2022. The news sent its shares up as much as 4.3% to 119.40 pence in early trading, making the stock the top gainer on the housing sector index, after they [fell by 7% in the last 3 months](https://www.financedigest.com/naturgys-profit-rises-on-lng-gains-soothing-shareholders-by-pietro-lombardi-madrid-reuters-spanish-power-utility-naturgy-reported-on-monday-an-88-jump-in-profit-for-the-first-six-months-of.html "Naturgy’s profit rises on LNG gains, soothing shareholders By Pietro Lombardi MADRID (Reuters) – Spanish power utility Naturgy reported on Monday an 88% jump in profit for the first six months of the year, boosted by strong earnings at its liquefied natural gas (LNG) business, which could help it to win over restive investors. Earlier this month, the company said it would increase its dividend floor through 2025 while trimming expected investment, as it sought to make rewarding shareholders a priority. Pleasing them has become a focus as Naturgy considers changes that could reshape the company and after arguments over the potential appointment of a chief executive. Naturgy’s first-half net profit jumped to 1.05 billion euros (.16 billion), boosted by its liquefied natural gas (LNG) business. Shares were down 0.2% in mid-morning trading, bucking deeper declines, in particular for Spain’s blue-chip banks and utilities after a general election on Sunday produced no clear winner. Renta 4 Banco analyst Angel Perez Llamazares said Naturgy performed better than expected, adding “cash flows also beat our expectation,” and debt fell more than expected. After natural gas prices hit record levels last year, Naturgy said a fall in procurement costs this year and hedging gains had boosed profits. In the first half of the year, the company “exceeded the objectives of operating efficiency, cash generation, investment materialisation and debt reduction,” Executive Chairman and CEO Francisco Reynes said. After rival Iberdrola named a separate CEO last year, Naturgy is the only large energy company in Spain to combine the roles of executive chairman and CEO. Earlier this month, the company raised the dividend floor to 1.40 euros a share, from 1.20 euros. Operating profit (earnings before interest, tax, depreciation and amortisation) is expected to reach 5.1 billion euros, compared with a previous guidance of 4.8 billion euros. It said it was targeting net profit of 1.8 billion euros in 2025. Naturgy also relaunched its plan to split regulated infrastructure operations and liberalised energy businesses into two listed companies. The project had been suspended after the Ukraine war disrupted energy markets and analysts are still sceptical. “We believe it is unlikely that Naturgy will be able to implement its asset split in the short term and it is also unlikely that a big change in the shareholding of the company would occur,” said RBC analyst Fernando Garcia. ( = 0.8986 euros) (Reporting by Pietro Lombardi, editing by Inti Landauro and Barbara Lewis)"). This update from Taylor Wimpey constitutes a clear case of ‘it could have been worse’, as a weakening property [market and high operational costs](https://www.financedigest.com/complaints-from-cost-centre-to-marketing-discipline.html "Complaints: From Cost-centre to Marketing Discipline") having combined to put huge pressure on the construction sector during H1 2023,” Andy Murphy, Director at investment research and consultancy Edison Group, said. Taylor Wimpey [expects operating profit](https://www.financedigest.com/uks-halfords-expects-pricing-efforts-to-drive-profits.html "UK’s Halfords expects pricing efforts to drive profits"), including joint ventures, to be in the range of 440 million pounds ($562.10 million) to 470 million pounds, in line with market expectations of 444 million pounds. The low end of that range would mark a 52% drop from 2022, after lower completions and [higher costs knocked its first-half profit margin](https://www.financedigest.com/paypal-adjusted-margin-forecast-cut-eclipses-higher-profit-expectations.html "PayPal adjusted margin forecast cut eclipses higher profit expectations") down to 14.4% from 20.4% in the same period last year. Taylor Wimpey’s order book – a key measure that gauges [future sales](https://www.financedigest.com/hyperkalaemia-treatment-market-sale-will-apprehended-to-see-impressive-growth-in-near-future.html "Hyperkalaemia Treatment Market Sale Will Apprehended To See Impressive Growth In Near Future") performance – stood at 2.14 billion pounds as of July. 2, down from 2.80 billion pounds a [year earlier](https://www.financedigest.com/uk-car-output-jumps-27-in-may-from-year-earlier-on-steady-ev-demand.html "UK car output jumps 27% in May from year earlier on steady EV demand"). Its cancellation [rate stood at 24% during the four weeks to July](https://www.financedigest.com/fed-officials-still-leaning-to-75-basis-point-rate-hike-in-july.html "Fed officials still leaning to 75-basis-point rate hike in July") 30, up from 19% year ago. ($1 = 0.7828 pounds) (Reporting by Suban Abdulla in London and Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu, Kate Holton and Jane Merriman) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---