Taylor Wimpey down after poor FY earnings
One of the UK’s largest housebuilders, Taylor Wimpey, has demonstrated just how difficult the conditions are for construction sector.
Input costs are climbing in a market that cannot pass on the increase in raw materials to the end consumer. Revenue was down 20.5% to £3.51bln, operating profit down 49.1% £ 470.2mln adjusted pretax profit down was down 47.8%. Yes, UK average selling prices did climb but not enough to raise profits. The full-year dividend is up 1.9%.
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Taylor Wimpey
Taylor Wimpey, one of the UK's largest house builders, recently announced some worrying financial results. Their revenues, operating profit, and adjusted pre-tax profit all experienced a significant drop. Revenues fell by 20.5% to £3.5bn, operating profit was down 49% to £470m, and adjusted pre-tax profit decreased by 47%. Although the company managed to increase the prices of their completed projects by 5.1%, they faced difficulties due to the rising costs of materials like bricks, tiles, cement, copper piping, and electrical wiring. Despite these challenges, Taylor Wimpey plans to increase their dividends by 1.9%. However, they did experience a 21.5% decrease in net cash to £677m.
The Competition Markets Authority
The company's stock has been on a downward trend, with the share price continuously dropping for five days in a row. Although it has improved slightly from its lowest point at £136, it is still down 2.25% after 30 minutes of trading. This decline is likely influenced by an ongoing investigation by the Competition Markets Authority (CMA). The CMA is looking into potential price fixing among house builders, and this investigation is causing concern for Taylor Wimpey as a major player in the industry. However, it is unclear whether Taylor Wimpey will be directly affected by the final decision reached by the CMA.
In general, it hasn't been a great start for house builders, and Taylor Wimpey is no exception. With disappointing financial figures and the ongoing investigation by the CMA, the company is facing challenges. Despite the drop in profits, they still plan to increase dividends, which might be seen as a positive move. However, the market has reacted negatively, and the company's stock price reflects this downturn. As the investigation continues, it remains to be seen how it will impact Taylor Wimpey and the housing industry as a whole.
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