ii view: buying opportunity at high yielder Taylor Wimpey?

First-half results to 29 June

• Build completions up 11% increase to 5,264 homes
• Operating profit down 11.7% to £161 million and including a £20 million charge for historical contractor remediation works
• Further cladding fire safety provision of £222 million
• Statutory loss of £92.1 million, down from a profit of £99.7 million
• Interim dividend of 4.67p per share, down from 4.8p per share last year
• Net cash held of £327 million, down from net cash of £584 million a year ago

Guidance:

• Continues to expect full-year UK home completions of between 10,400 to 10,800
• Now expects full year operating profit of £424 million, impacted by £20 million charge, potentially up from 2024’s £416 million

Chief executive Jennie Daly said:

"We delivered a good underlying performance in the first half of 2025 in line with our expectations, notwithstanding softer market conditions in the second quarter. 

“While affordability remains constrained, particularly amongst first-time buyers, lenders remain committed to the UK mortgage market and long term fundamentals are positive, with significant unmet need for UK housing. 

“Taylor Wimpey is a strong and agile business benefiting from a robust balance sheet and excellent landbank and is well positioned to deliver growth and attractive returns for shareholders."

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 ii round-up:

Taylor Wimpey (LSE:TW.) was formed from the merger of George Wimpey and Taylor Woodrow back in 2007. 

Today it operates across 22 UK regional divisions as well as a small Spanish housebuilding business.  

For a round-up of these latest results announced on 30 July, please click here.

ii view:

Tracing its history back to 1880, Taylor Wimpey today employs over 4,000 people. Headquartered in High Wycombe, Buckinghamshire, the group builds homes from flats to six-bedroom houses. The company’s rivals include rivals Barratt Redrow, Berkeley Group and Bellway. Sales for its small Spanish business totalled just under 6% of overall revenues during 2024. 

For investors, a further cladding fire safety provision and a charge for historical contractor remediation works make investors nervous about other possible future charges. A 3% cut to the interim dividend payment is disappointing albeit in line with the company’s policy linked to the net asset value. The rate of home sales slowed in Q2 compared to Q1 with rumoured UK tax rises to come potentially hurting, while net cash held is down to £327 million from a previous £584 million. 

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More favourably, hopes of another Bank of England interest rate cut persist. Previous consolidation across the sector with Barratt and Redrow merging warrants consideration. A government emphasis on easier planning regulations remains, while a net asset value-to-share price of under one times and below a three-year average may suggest emerging value. 

In all, and despite clear risks, a forecast dividend yield of over 8.5% and consensus analyst estimate of fair value above 130p per share look to provide grounds for continued, if now more cautious, optimism.  

Positives: 

• Improving customer service scores
• Attractive dividend yield (not guaranteed)

Negatives:

• Uncertain economic outlook
• Subject to planning approvals

The average rating of stock market analysts:

Buy