Taylor Wimpey plc Drops Despite Strong First-Half Performance

The share price of housebuilder Taylor Wimpey (LSE: TW) is currently down 2%, following release of a trading update for the period to 29 June 2014, ahead of publication of the company’s half-year results, which are due on 30 July.

housebuildingTaylor Wimpey reports that it’s performed strongly in the first half of this year. It says that sales rates and pricing have been at the upper end of expectations, and that it anticipates being able to report improvements in all of its key objectives, together with good progress having been made towards the medium-term targets that it announced back in May. In particular, the company says that it expects its first-half operating profit margin for 2014 to be around 16%, up substantially from 13.1% in the first-half of last year.

The company says that first-half results will have benefited from the traditionally strong spring selling season, and that there have been  market-led house price increases across all of its regional markets. Taylor Wimpey also says that its total order book stood at £1,584m at 29 June 2014 (compared with £1,255m on 30 June last year).

And whilst it reports that conditions in Spain remain “challenging”, the company says that it anticipates that its Spanish business will make a “positive contribution” to the group’s performance this year.

Looking ahead, Taylor Wimpey says that underlying improvement in the economy and the extension of the ‘Help to Buy’ scheme to 2020 have reduced short-to-medium term risk in its market, and that it’s confident of delivering on its full year expectations.

At just under 115p, Taylor Wimpey’s share price is up 12.5% since this time last year, a period in which the FTSE 100 has only risen 7.5%. And the story over five years is even better — Taylor Wimpey has gained 240%, versus a 62% increase in the FTSE 100. 

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Jon doesn't own shares in Taylor Wimpey.