Taylor Wimpey upgrades margin guidance, hails steady market

11th Nov 2014 08:05

Housebuilder Taylor Wimpey has said that market conditions moderated in the third quarter but still remain positive, as it upgraded its margin guidance for the full year ahead of analysts' expectations.The company said it now expects its full-year operating margin to grow by around 400 basis points (bp). In July it had guided to an increase of "at least 300bp" from the 13.6% in 2013.Analysts at Liberum had previously pencilled in a 350bp margin improvement and said they expect consensus forecasts to be upgraded.Taylor Wimpey said that the UK housing market was still growing with demand healthy and customer confidence good.Sales rates per outlet per week were 0.66 for the year to date, slightly ahead of the 0.65 rate for the same period last year.However, sales rates have fallen 5% year-on-year in the second half to date to 0.60, though Liberum said that "this is really a function of strong comparatives, and has been talked about elsewhere".Nevertheless, Taylor Wimpey welcomed the the Mortgage Market Review and new guidelines from the Bank of England on lending as "positive move[s] for the long-term health of the market"."We are encouraged that conditions have moderated but remained positive. Today we are operating in a UK housing market which is growing steadily and sustainably," said chief executive Pete Redfern.The group is fully sold for 2014 and is already 25% forward sold for 2015 completions. The current order book represents 7,814 homes, up from 7,557 at the same point last year.Looking ahead, the company said: "With a reduced risk of interest rate increases in the near term, but also with tighter but sensible regulation, we believe that UK house prices are most likely to closely reflect inflation and recovery in the underlying UK economy."This stable but improving environment should be positive for both homebuyers and homebuilders."Analyst Robin Hardy from Shore Capital said that Tuesday's update was "the most positive so far this season".