‘Taylor Wimpey is heading into another round of lockdowns full of confidence’

Taylor Wimpey will continue construction through the UK’s second lockdown, and will be able to receive customers in sales centres and show homes. Construction is running at close to normal levels.

Management expects full year operating profit for 2020 to be towards the top end of market expectations of between £242m and £292m. Management also expects operating profit to be materially above the top end of analyst estimates in 2021, i.e. above £626m.

The shares rose 8.2% in early trading.

William Ryder, Equity Analyst at Hargreaves Lansdown said: “Taylor Wimpey is heading into another round of lockdowns full of confidence. The group will keep building despite the new restrictions, but crucially will also be allowed to receive customers in show homes and sales centres. This means the group’s sales rate shouldn’t decline nearly as much as it did during the first lockdown. Land buying has picked up and given current prices the group can pick up land with attractive implied margins and returns on capital. As a result management has told the city to expect more of them going forward.

“It sounds like they’re feeling good over at Taylor HQ and we’re starting to share the optimism. Having said that the economy is still in a relatively fragile position, and if we do enter a sustained recession house prices may still fall. Either way, we didn’t expect to feel this positive back in March.”