Taylor Wimpey Removes One Level Of Group Management

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The company is removing one level of operational management across the group and streamlining its London operational structure to focus on affordable price points that meet the accessibility needs of Londoners.He is also in consultation on a series of reductions in the overheads of central and commercial units. This will generate £ 15million in annual operational savings from 2021.

Taylor Wimpey is also on a land-buying frenzy following the £ 500million fundraiser in June, agreeing terms on 70 sites totaling 14,500 plots worth £ 826million.

Pete Redfern, Managing Director, said: “Meeting the challenges of the past six months has also highlighted opportunities for continuous improvement in efficiency and performance, as our recent investments in systems and processes have performed well.

He said the company now expects to beat previous profit guidance for the year, with next year’s shipments expected to return to last year’s level.

In a statement early in the second half this morning, Redfern said: “All sites continue to operate under Covid-secure guidelines, and throughout the second half of the year we have focused on removing bottlenecks to speed up the pace of construction without compromising safety or quality.

“Right now, the majority of our sites are operating at or near normal construction rates and we do not expect this to be affected by the new restrictions.”

He added, “With our sites operating at or near normal capacity and with a strong backlog and resilient customer demand, we now expect deliveries for 2021 to be between 85% and 90% of 2019 levels.”

Taylor Wimpey’s backlog is up 11% to £ 3 billion from a year ago. This equates to 11,530 dwellings (2019: 10,486).

The group also took land attractive returns in line with its medium-term operating margin target of 21-22% and with an average return on capital employed of 34%.

This includes an increased number of smaller sites compared to recent years to achieve a better balance between large and small sites.

Redfern said: “Looking ahead, we are on the right track to deliver results for the year 2020 above market expectations and with strong operational momentum and positive positive indicators, our confidence in 2021 has increased.

“As a result, assuming the market remains broadly stable, we expect to deliver 2021 operating profit significantly above the high end of the current consensus range.”

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