UK FTSE250 builder Taylor Wimpey produced an impressive result today, purely looking through the numbers it's difficult to see anything wrong and there are a lot of things going right for the company it would seem.
Here's some of the highlights;
44% increase in operating profit* to £228.8 million (2011: £159.3 million)
Completed 10,886 homes at an average selling price of £181k (2011: 10,180 homes at £171k)
Extensive strategic landbank of 100,340 plots (2011: 86,236)
Total order book value increased by 14% to £948 million at 31 December 2012 (2011: £835 million)
Customer satisfaction increased to 93.2% (2011: 92.1%)
Reduction in net debt to £59.0 million (31 December 2011: £116.9 million) with further improved debt efficiencieshttp://www.digitallook.com/news/rns/20729318-10332/TW_-Results_for_the_year_ended_31_December_2012_html
What is interesting is that despite a largely stagnant UK housing market, quite a few of the listed FTSE construction companies have actually defied the bearish calls of why they should still be falling in price and actually done rather well in the last few years. Of course, like the banks lots of them fell off a cliff back in 2007-8, but since then many have recovered well often on the back of good numbers.
The company doesn't offer a great dividend at less then 1%, but in terms of price growth it has been steady as you go for the past couple of years.
Below is the impressive weekly chart showing the clear momentum.
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| Taylor Wimpey - Weekly |
It was a similar story with Barratts. I think the survivors will do well the next few years. The cheap land they bought in 2008/9 is now starting to be sold off with houses on top of it. Whilst the sales price is stagnant their costs are reducing (cheaper lamd, little wage pressure and discounted supplies). They dont need house price inflation to be profitable.
ReplyDeleteQuite a few did hit difficulties and saw their share price decline sharply during 2008, so I suppose they are coming off lows, but the performance in recent years has been impressive and backed up by good numbers if you like fundamentals.
DeleteTop performers share price performance last two years;
Telford Homes 156.6%
Barratt 132.30%
Persimmon 107.33%
Taylor Wimpey 100.56%
I'm also reminded of that other favorite for bears to have a go at Rightmove, up almost 261% on the last 5 years and now over 1800p, a new high. P/E is a little tasty at 27, but you will always pay a higher P/E for growth.