Taylor Wimpey operating profit falls by almost half

Taylor Wimpey saw its operating profit fall by 49% for its last financial year despite hitting the top end of its expectations and seeing encouraging signs of improvement in the market.
For the year ending December 31 2023, the housebuilder reported a group operating profit of £470.2million, down from £923.4million in 2022. Taylor Wimpey had previously predicted a profit of between £440million and £470million.
The company’s pre-tax profit fell to £473.8million, down 43% year-on-year, while revenue dropped by over a fifth to £3,514.5million.
The housebuilder’s operating profit margin fell from 20.9% to 13.4%, which it put down to increasing building costs which outstripped price growth, while fewer completions to recover overhead costs from.
Despite the fall in profits, Taylor Wimpey said that current trading was seeing “encouraging signs of improvement with reduced mortgage rates positively impacting affordability and confidence in our customer base”, and also that customer interest remained high.
Looking forward to this year, Taylor Wimpey said that it expected house completions to be in the region of 9,500 to 10,000 homes, potentially lower than 2023 due to a lower order book and continuing tough market conditions.
Taylor Wimpey CEO, Jennie Daly, said: “We delivered a good full year performance in line with expectations despite a challenging market, benefiting from our sharp operational focus, the quality of our homes and locations and a continued proactive sales effort.”
“While the planning environment remains challenging, we have a high-quality, well-invested land bank and a strong financial position which underpins our ability to provide investors with a reliable income stream via our differentiated Ordinary Dividend Policy.”
“Looking ahead, we are well-positioned in an attractive market, with significant underlying demand for our quality homes and are poised for growth from 2025, assuming supportive market conditions.”
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