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Taylor Wimpey reinstates dividend as 2020 profit falls by 68%

Taylor Wimpey sees 38.9% decrease in completions

Taylor Wimpey (LON:TW) confirmed on Tuesday that it would resume its dividend payment after seeing a fall in pre-tax profit of 68%.

The housebuilder’s profit fell from £673.9m in 2019 to £217m.

There was also a 38.9% decrease in completion, down to 9,799 in 2020 from 16,042 the year before.

Taylor Wimpey stated that the results were expected, while the company saw a return towards normal levels of building during the second half of the year.

In March the housebuilder cancelled its dividend payment to protect its balance sheet during the pandemic. However, Taylor Wimpey has now reinstated its dividend at 4.14p per share. If approved then the total payout will come to £151m.

At early morning trade, the company’s share price is up by over 3% to 171.7p. It follows on from a strong performance yesterday as rumours circulated of an extension of the stamp duty holiday and a new help to buy scheme in Rishi Sunak’s upcoming budget circulated.

Pete Redfern, chief executive at Taylor Wimpey, commented on the results:

“2020 was a very challenging year, during which our priority has continued to be the health and safety of our colleagues, customers, suppliers and subcontractors. Operating performance has bounced back strongly in the second half of 2020, with build capacity returning to near normal levels and strong sales,” Redfern said.

“We are confident in the medium term performance of the housing market and therefore accelerated our land purchases from May 2020 as high-quality land became available at attractive rates. We are now focusing on driving efficiencies across the business, the roll out of our new house type range and implementing our ambitious new environmental strategy.”

“The UK housing market has been resilient and continues to reinforce our confidence in our outlook. We are a cash generative business with a strong balance sheet, and we are pleased to announce today that we will reinstate our ordinary dividend in line with our aim of providing a reliable income stream to our shareholders.”

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