Taylor Wimpey Plc · LSE:TW.
Taylor Wimpey — H1 2024 Earnings Presentation
46 slides from Taylor Wimpey's earnings presentation, Jul 31, 2024
Slide 1: Half Year Results Presentation for the six months to 30 June 2024
Half Year Results Presentation for the six months to 30 June 2024 31 July 2024
Slide 2: Disclaimer
Disclaimer For the purposes of this notice, this “presentation” shall include these slides and any question-and-answer session that follows oral briefings by representatives of Taylor Wimpey plc. This presentation is for information purposes only and is not intended to, and does not constitute or fo
Slide 3: Agenda
Agenda Highlights Financial review Building for the future Jennie Daly Chris Carney Jennie Daly 3 Half Year Results Presentation for the six months to 30 June 2024
Slide 4: Highlights
Highlights Jennie Daly Chief Executive
Slide 5: First half highlights
First half highlights Net private sales rate Group completions Group operating 2024 interim dividend (per outlet per week) including joint profit margin* per share ventures 0.75 4,728 12.0% 4.80p (H1 2023: 0.71) (H1 2023: 5,120) (H1 2023: 14.4%) (H1 2023: 4.79p) Plots in short term % of completions
Slide 6: Trading performance reflecting a more stable backdrop
Trading performance reflecting a more stable backdrop Impact of mortgage rates on sales rates Market remains resilient 7 1.00 ● Net private reservation rate of 0.75 (H1 2023: 0.71), and 0.69 excluding bulk deals (H1 2023: 0.62) 0.90 6 0.80 ● Cancellation rate (private) was 14% (H1 2023: 16%) 5 0.70
Slide 7: Financial review
Financial review Chris Carney Group Finance Director
Slide 8: Summary Group results
Summary Group results £m (before exceptional items) H1 2024 H1 2023 Change FY 2023 Revenue 1,517.7 1,637.1 (7.3)% 3,514.5 Gross profit 292.2 353.9 (17.4)% 716.5 Gross profit margin % 19.3 21.6 (2.3)ppt 20.4 Operating profit* 182.3 235.6 (22.6)% 470.2 Operating profit margin % 12.0 14.4 (2.4)ppt 13.4
Slide 9: First half UK performance in line with our expectations
First half UK performance in line with our expectations H1 2024 H1 2023 Change FY 2023 Legal completions – excl JVs 4,512 4,854 (7.0)% 10,356 Private 3,508 3,743 (6.3)% 8,005 Affordable 1,004 1,111 (9.6)% 2,351 Average selling price – excl JVs 317 320 (0.9)% 324 Private £000 356 366 (2.7)% 370 Affor
Slide 10: UK operating profit margin
UK operating profit margin Impact on H1 2024 ● The decline in H1 2024 operating profit margin Illustrative movements in UK operating profit margin Annual income statement is driven by: H1 2023 to H1 2024 change (ppt) Market inflation on selling prices c.(1.5%)* (1.0) ● Realisation of build cost infl
Slide 11: Summary Group balance sheet
Summary Group balance sheet £m 30 June 2024 2 July 2023 Change 31 Dec 2023 Long term assets and JVs 143.2 129.8 13.4 143.2 Land 3,252.0 3,362.1 (110.1) 3,269.5 WIP 2,001.5 1,926.0 75.5 1,900.1 Debtors 167.1 177.1 (10.0) 152.5 Land creditors (494.4) (588.0) 93.6 (516.1) Other creditors (891.3) (851.0
Slide 12: Building safety update
Building safety update Financial position £m ● Long-held belief that leaseholders should not pay Total funds set aside for cladding and fire safety remediation 245 at 31 December 2023 ● Dedicated remediation team in place 2024 H1 provision increase: ● Good progress being made with design, tenders an
Slide 13: WIP investment for increased delivery in H2
WIP investment for increased delivery in H2 Group cash flow 1,000 23.8 (12.1) (86.5) 182.3 (4.5) 103.0 (37.9) 800 (169.5) 677.9 600 10.5 584.0 £m 400 200 0 Opening net cash Operating profit Movement in Investment in Investment in Payments to Cash generated Tax paid and Dividends paid Other*** Closin
Slide 14: Our capital allocation priorities
Our capital allocation priorities Highly cash generative business allows for investment for growth and attractive shareholder returns 1 2 3 4 Investment in land and Maintain a strong Sustainable ordinary WIP to drive future Return excess cash balance sheet dividend growth Maintain low adjusted geari
Slide 15: 2024 guidance
2024 guidance Guidance UK completions (excl. JVs) Towards the upper end of 9,500 to 10,000 range Group operating profit (incl. JVs) In line with current market expectations* Year end net cash c.£550 million Net finance charges c.£4 million net income (including c.£17 million cash receipt) JV share o
Slide 16: Building for the future
Building for the future Jennie Daly Chief Executive
Slide 17: Performing well in the current market
Performing well in the current market H2 2024 (w/e 28 July 2024) H1 2024 H2 2023 H1 2023 Average outlets open 215 224 232 244 Private sales rate (net) 0.64 0.75 0.52 0.71 Underlying private sales rate excl. bulk (net) 0.64 0.69 0.46 0.62 Private sales price £000 346 349 352 352 Cancellation rate (pr
Slide 18: Short term customer demand remains stable
Short term customer demand remains stable Total website traffic continues to be supported by marketing Private reservations by buyer type approach 100% 1% 5% 11% 10% 8% 6% 8% 3% 4% 5% 80% 49% 49% 60% 51% 50% 48% 40% 20% 44% 36% 35% 37% 40% 0% 1 6 11 16 21 26 31 36 41 46 51 H1 2022 H2 2022 H1 2023 H2
Slide 19: Mortgage costs remain higher than in recent years
Mortgage costs remain higher than in recent years, but longer term fundamentals robust Buying remains cheaper than renting for those with ● Mortgage rates remain high however product availability is at larger deposits the highest level since February 2008* £2,000 ● Ran nationwide events on sites sup
Slide 20: Planning backdrop remained challenging in the first half
Planning backdrop remained challenging in the first half Planning approvals continue to decline 120,000 7,000 6,000 100,000 5,000 80,000 Number of projects Number of units 4,000 60,000 3,000 40,000 2,000 20,000 1,000 - - Q1 2006 Q1 2008 Q1 2010 Q1 2012 Q1 2014 Q1 2016 Q1 2018 Q1 2020 Q1 2022 Q1 2024
Slide 21: New Government plans to get Britain building again
New Government plans to “get Britain building again” ● Announcements to date: ● Government aims to deliver 1.5 million homes during the Parliament ● Restoration of mandatory housing targets ● New taskforce to accelerate stalled housing sites ● Funding additional planning officers ● Planning and Infr
Slide 22: A growth focused approach to the planning system
“A growth focused approach to the planning system” ● Consultation draft NPPF (July 2024): ● Enshrine the return to mandatory housing targets ● Change to the Standard Methodology of calculating new housing targets ● Require Local Authorities to use the same method ● Local targets will rise to a total
Slide 23: Well positioned for growth: land acquisitions and strategic pipeline
Well positioned for growth: good quality land acquisitions and strong strategic pipeline ● Underpinned by a strong landbank, strategic pipeline and balance sheet ● Excellent short term landbank of c.79k plots (31 December 2023: c.80k) despite reduced landbuying ● Converted c.2k plots from the strate
Slide 24: Strong visibility of land to prepare for growth from 2025
Strong visibility of land to prepare for growth from 2025, assuming supportive market conditions ● Actively preparing for planning changes ● c.30k plots in planning for first principle determination ● Additional applications ready to go if we see the proposed grey belt changes come through ● Own and
Slide 25: Driving operational efficiencies to protect value and prepare for growth
Driving operational efficiencies to protect value and prepare for growth ● Continuing to drive incremental efficiencies and increase standardisation as a platform for growth ● Delivered the first kits from our timber frame factory in H1 2024 ● Factory awarded ISO:9001 by British Standards Institute
Slide 26: Building for the future
Building for the future Delivering on our 2024 priorities Outlook - Expect full year UK completions excluding joint ventures - Continue to prioritise value to be towards the upper end of the previous guidance range of 9,500 to 10,000 - Remain focused on building a strong order book - Retained the in
Slide 27: Investment case
Investment case Q&A Strong and resilient Differentiated by Sustainable and Reliable business landbank responsible shareholder returns Operational High-quality ESG embedded Committed to paying excellence to landbank together throughout the an annual ordinary optimise margin and with a significant org
Slide 28: Future investor communications
Future investor communications ● 7 November 2024 Trading update ● 16 January 2025 Trading update ● 27 February 2025 Full year results 2024 ● 30 April 2025 AGM and trading update 28 Half Year Results Presentation for the six months to 30 June 2024
Slide 29: Appendices
Appendices Half Year Results Presentation for the six months to 30 June 2024
Slide 30: Operational KPIs
Operational KPIs Land H1 2024 H1 2023 FY 2023 Land cost as % of ASP on approvals 15.6% 12.9% 15.2% Landbank years c.7.8 c.7.0 c.7.7 % of completions from strategically sourced land 41% 46% 45% Operational excellence Construction Quality Review (average score / 6) 4.92 4.90 4.89 Average reportable it
Slide 31: Forward indicators
Forward indicators Organic customer interest* Total website traffic 1 6 11 16 21 26 31 36 41 46 51 1 6 11 16 21 26 31 36 41 46 51 Week Week 2022 2023 2024 2022 2023 2024 Total enquiries Appointments and walk-ins 1 6 11 16 21 26 31 36 41 46 51 1 6 11 16 21 26 31 36 41 46 51 Week Week 2022 2023 2024 2
Slide 32: Summary income statement
Summary income statement* Group £m H1 2024 H1 2023 Change FY 2023 Revenue 1,517.7 1,637.1 (7.3)% 3,514.5 Cost of sales (1,225.5) (1,283.2) (4.5)% (2,798.0) Gross profit 292.2 353.9 (17.4)% 716.5 Net operating expenses (110.7) (118.0) (6.2)% (248.7) Profit on ordinary activities 181.5 235.9 (23.1)% 4
Slide 33: Cash flow summary
Cash flow summary Group £m H1 2024 FY 2023 H2 2023 H1 2023 Profit from ordinary activities before financing 93.5 467.8 231.9 235.9 Increase in inventories (98.6) (148.7) 84.2 (232.9) Exceptional items charge 88.0 - - - Other operating items* 20.1 (30.2) (42.8) 12.6 Cash generated from operations 103
Slide 34: Financing
Financing ● Net cash at 30 June 2024 of £584.0 million (31 December 2023: £677.9 million, 2 July 2023: £654.9 million) ● Adjusted gearing, including land creditors, of -2.0% (31 December 2023: -3.6%, 2 July 2023: -1.5%) ● Average net cash during H1 2024 of £582.4 million (FY 2023: £606.6 million, H1
Slide 35: Finance charges
Finance charges £m H1 2024 H1 2023 Change FY 2023 Financial indebtedness 4.0 2.7 1.3 8.3 Foreign exchange movements 0.1 0.3 (0.2) 0.5 Unwind of land creditors and 6.9 7.1 (0.2) 14.8 other items Pensions 0.6 0.7 (0.1) 1.3 Interest on lease liabilities 0.7 0.3 0.4 1.0 Total 12.3 11.1 1.2 25.9 35 Half
Slide 36: Tax
Tax Asset / (liability) Current tax £m Deferred tax £m Net tax £m As at 1 January 2024 (1.6) 23.4 21.8 Income statement (32.8) 6.1 (26.7) SOCI / SOCIE - (0.5) (0.5) Cash paid 49.6 - 49.6 Other (including foreign (0.1) (0.2) (0.3) exchange) As at 30 June 2024 15.1 28.8 43.9 ● Effective tax rate of 26
Slide 37: Pension funding
Pension funding HY 2024 FY 2023 FY 2022 Deficit contributions to the Scheme - - - Payments to escrow - - - Pension Funding Partnership 5.1 5.1 5.1 Scheme expenses 1.0 2.0 2.0 Total 6.1 7.1 7.1 ● IAS 19 surplus at 30 June 2024 of £126.9 million, deficit of £21.5 million recognised after IFRIC 14 adju
Slide 38: UK completions mix
UK completions mix UK completions £201k – £251k – £301k – £451k – £601k – H1 2024 <£200k £250k £300k £450k £600k £1m >£1m Total Price band 19% 14% 18% 36% 9% 3% 1% 100% UK completions H1 2024 FY 2023 H2 2023 H1 2023 FY 2022 H2 2022 H1 2022 First time buyers 31% 29% 28% 31% 35% 35% 35% Second time bu
Slide 39: UK land commitments
UK land commitments As at 30 As at 31 £m < 1 yr 1-2 yrs 2-5 yrs 5+ yrs Jun 2024 Dec 2023 Committed cash payments in respect of unconditional land 256 121 66 30 473 498 contracts Expected cash payments in respect of conditional land 103 77 61 60 301 279 contracts ● Included in unconditional land cont
Slide 40: UK planning permissions
UK planning permissions 20,000 Sites with implementable planning permission 18,000 98.4% 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0.8% 0.8% 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 Started on site as
Slide 41: UK land pipeline
UK land pipeline 30 Jun 2024 31 Dec 2023 Plots Owned Controlled Total Total Detailed planning 34,497 2,595 37,092 38,952 Outline planning 21,821 8,461 30,282 28,083 Resolution to grant 3,159 8,145 11,304 13,288 Short term 59,477 19,201 78,678 80,323 Allocated strategic* 4,707 6,705 11,412 11,353 Non
Slide 42: UK land portfolio - net cost
UK land portfolio ‒ net cost 30 Jun 2024 31 Dec 2023 £m Owned Controlled Total Total Detailed planning 1,867 30 1,897 1,977 Outline planning 726 21 747 700 Resolution to grant 83 16 99 100 Short term 2,676 67 2,743 2,777 plots 59,477 19,201 78,678 80,323 Strategic* 230 116 346 357 plots* 33,527 106,
Slide 43: UK landbank
UK landbank ● Land cost in short term owned landbank is 13.7% of ASP (2 July 2023: 13.3%), supported by strategic pipeline conversions ● Land cost as % of ASP on H1 2024 approvals of 15.6% (H1 2023: 12.9%) ● Potential revenue in the landbank at 30 June 2024 was £60 billion (31 December 2023: £61 bil
Slide 44: UK sales performance
UK sales performance Private and affordable reservations H2 2024 (w/e excl. JVs 28 July 2024) H1 2024 H2 2023 H1 2023 Average outlets open 215 224 232 244 Average sales rate (net) 0.65 0.85 0.73 0.84 Average selling price £000 342 329 305 325 H2 2024 (w/e As at 28 July 2024) 30 June 2024 31 Dec 2023
Slide 45: Spain financial summary
Spain financial summary H1 2024 H1 2023 Change FY 2023 Average number of active sites 23 23 - 23 Legal completions 142 228 (37.7)% 410 Average selling price £000 433 326 32.8% 347 Average selling price €000 509 374 36.1% 400 Revenue £m 61.5 74.1 (17.0)% 142.8 Operating profit £m 14.4 19.7 (26.9)% 35
Slide 46: Definitions
Definitions ● Operating profit is defined as profit on ordinary activities before financing, exceptional items and tax, after share of results of joint ventures. ● Operating profit margin is defined as operating profit divided by revenue. ● Adjusted basic earnings per share represents earnings attri