Anglo Asian set to reach record annual revenue in impressive Tuesday update
Anglo Asian Mining PLC (LON:AAZ) have given shareholders an impressive updated on Tuesday.
The firm said that it is looking at record annual revenue, due to solid production and a rise in commodity prices.
Anglo Asian’s 2019 production was 82,795 gold equivalent ounces, 1.1% lower than the year before. Copper was up 34% to 2,210 tonnes, with gold down 4% to 70,098 ounces.
The firm however did note that silver production had declined by 24% in the period, to 159,356 ounces.
In the fourth quarter, gold ounce production fell 3% year on year to 21,284 ounces. Gold fell 1.7%, silver by 37% however copper rose 24%.
The firm had accounted for $1,250 per ounce gold price in 2019, however the price rose over 18% across the year which contributed to the impressive performance highlighted in the update.
Copper prices rose 3.5% over the year, and were ahead of budget, with silver climbing 15% and easily topping Anglo Asian’s budgeted price.
Anglo Asian CEO Reza Vaziri commented:
“We have had another strong year, delivering production in line with expectations and also making good progress with our exploration programme. We report our production in gold equivalent ounces which have reduced due to the increase in the market price of gold relative to the market price of copper during the year. Our production calculated as gold equivalent ounces using our budgeted metal prices was 82,795 ounces and within our original production forecast.
“The Company’s financial performance continues to be exceptional. We have increased net cash in 2019 by $15.1 million, notwithstanding paying dividends of $8.7 million and corporation taxes of $7.5 million in the year. The Company will achieve the significant milestone of becoming debt free early next month when the final installment of the refinancing loan is repaid. This strong cash generation will allow the Company to continue to enhance our announced dividend policy.
“The Company is in a strong operational position and robust financial health as we move into 2020. I look forward to updating you on the progress of our exploration programme which we anticipate releasing within quarter one and other activities which the Company will be carrying out during the rest of the year.”
Savannah Resources win licence with Rio Tinto for Mozambique operations
Savannah Resources (LON:SAV) have told the market that they have received a grant in Mozambique for a licence.
Shares in Savannah trade at 2p (+5.43%). 14/1/20 12:02BST.
The firm saw its shares jump as it won a licence to operate for the Mutamba heavy mineral sands project.
Savannah operates the Mutamba project in a joint venture with titan Rio Tinto PLC (LON:RIO). The firm has a flagship asset of he Mina do Barroso lithium project in Portugal.
Mozambique has now granted a licence for Mutamba which lasts until September 2044, with an option to extend for another 25 years.
The Mutamba project has shown a lot of potential for both firms as it has indicated and inferred mineral resource of 4.4 billion tonnes of ore at 3.9% total heavy minerals.
Additionally, the firm hopes that it will commence production this year initially at a rate of 456,000 tonnes of ilmenite and 118,000 tonnes of non-magnetic concentrate.
David Archer, Savannah’s Chief Executive Officer said:
“The issue of Licence 9228C by the Government of Mozambique completes the licensing process for the three core Mutamba concessions. The process has been rigorous and demanding but we have now achieved one of the most important milestones in the orderly progression towards mine development. In the short term, our focus will be to continue to progress the Mutamba Pre-Feasibility Study (‘PFS’) towards completion, which, upon delivery, will trigger the increase in our interest in the Project from 20% to 35%. With an Indicated and Inferred Mineral Resource off 4.4Bt at 3.9% total heavy minerals, the global significance of the opportunity is clear and compelling.”
Savannah Resources – full of potential
The firm has seen a very successful period of trading, as it has made progress on its operations in Mozambique.
In an update in December, the firm said the minister of Mineral Resources & Energy has issued Mining Licence 9735C to its subsidiary Matilda Minerals Lda. The licence covers 11,948 hectares. It is valid to April 2044 and includes a 25-year extension option.
Savannah have said that they have won a new mining licence award for the Mutamba mineral sands project in Mozambique.
The 16,126 hectare licence is valid until May 2044, with the possibility of an extension for another 25 years, said Savannah. The first mining concession award at Mutamba was announced on Monday by Savannah.
“We are delighted with progress thus far at Mutamba, which we’re developing in partnership with Rio Tinto PLC. We believe this is one of the most attractive undeveloped mineral sands deposits in the world,” said Savannah’s Chief Executive David Archer.
Further expansion for Rio Tinto
Rio Tinto have been busy looking at expanding their operations, and have done so successfully.
At the start of December, it was confirmed that Apple Inc (NASDAQ:AAPL) had bought the first batch of carbon-free aluminum, in an attempt to expand its environmental strategy policies.
The metal has been provided by Elyis, a Montreal based firm composing of Alcoa Corp (NYSE:AA) and Rio Tinto.
Apple announced that the aluminum will be shipped this month from an an Alcoa research facility in Pittsburgh and used in Apple products, although the technology company did not say which ones.
The Alcoa-Rio partnership want to commercialize a technology that uses ceramic anode to make aluminum which only emits oxygen by 2024.
Alcoa has already produced test metal with the process and joined with Rio Tinto to bring it up to commercial scale. Elysis plans to licence the technology and says that existing smelting facilities can be retrofitted to use it.
Savannah have once again given shareholders an impressive update, and should make headways in developing their operations in Mozambique with the support of Rio Tinto.
Serabi Gold finished 2019 with its highest quarterly production
Brazil-focused mining company Serabi Gold (LON: SRB) topped off a record year of gold production with a fourth quarter to match.
Production in Q4 was up to 10,223 ounces, which topped off annual production at 40,101 ounces, which represented a 7% improvement year-on-year, from 37,108 ounces during 2018.
The company added that during the quarter, it mined a total of 44,092 tonnes of gold at 6.69 g/t of gold, as well as completing 2,908 metres of horizontal development.
Operationally, it stated that it had undertaken electrical and mechanical testing of an ore sorter, which was in the ‘final stages’ of installation between the Group’s crushing and milling sections.
It added that it has a public hearing for permitting at Corringa timetabled for 6 February, with this being the final step for receipt of a preliminary licence. It finished by saying that its step out drilling campaign at Sao Chico ‘significantly extends’ resource beyond current mine limits .
Serabi’s year-end cash holdings stood at US $14.3 million, it anticipates full-year production in the region of 45,000 and 46,000 ounces.
Serabi Gold Comments
Lauding today’s update, CEO Mike Hodgson stated,“This was another excellent quarter, with over 10,000 ounces produced and resulting in the Company having annual production in excess of 40,000 ounces of gold for the first time in our operational history. We have now produced more than 10,000 ounces in five of the last six quarters, demonstrating strong operational consistency.”
“Mining and plant throughput rates and grades have remained consistent throughout the year, but the respective eight per cent and five per cent improvements, compared with 2018, have allowed the operation to exceed 40,000 ounces of gold for the first time. With the plant operating at full capacity the increased production and the operational consistency throughout the year is extremely satisfying. The year on year production improvement was helped by the processing of approximately 30,000 tonnes of stockpiled gold bearing flotation tailings, with this material have gold grades averaging over 4.5g/t.”
“With the operation being plant constrained, every hour counts, hence we focus strongly on the quality of the ore feed and maximising plant availability. With the process plant running so well, we look forward to the commissioning of the ore sorter during this quarter. This will ‘screen out’ waste rock ahead of the milling section and liberate much needed capacity, allowing us to achieve improved levels of gold production in 2020 without needing to expand the milling capacity.”
“Development and production from the Palito orebody continued to focus on the Chico da Santa sector, which hosts the narrow but very high grade Jatoba, Mogno and Ipe veins, though during the fourth quarter the Company recommenced the development of the G3 vein. This is being developed on the 130mRLl, to access an area successfully drilled from surface during 2019. The G3 vein was very much the ‘backbone’ of Palito historical production between 2004 and 2008 and again between 2013 and 2016. The G3 vein is generally wider than many of the others within the Palito ore body and exhibits exceptional copper and gold grades. I therefore have high expectations of this development and anticipate the contribution that the G3 vein will make to production in 2020.”
Investor notes
Elsewhere in mining, AMG Advanced Metallurgical Group N.V. (AMS: AMG) announced a new appointment, ARC Minerals Ltd (LON: ARCM) uncovered high-grade copper assays, Lucara Diamond Corp (TSE: LUC) was pessimistic in its revenue guidance and MC Mining (LON: MCM) was granted a coal mining right in South Africa.
The Company’s shares are currently trading at 76.00p, Peel Hunt analysts reiterated their ‘Buy’ stance on Serabi Gold stock. Neither a p/e ratio nor a dividend yield are available, its market cap is £45.36 million.
DFS Furniture sales fall, however remain optimistic regardless of political complications
DFS Furniture (LON:DFS) have seen their shares in red as the firm gave shareholders a modest update which saw their sales fall.
Shares in DFS dipped 0.36% on Tuesday morning to 279p. 14/1/20 11:45BST.
The firm said that interim sales fell, however they reiterated the fact that they expect full year results to be in line with expectations.
The optimism provided was due to a recent uptick in order intake momentum, which will drive results.
In the 26 weeks period, which ended on December 19 the firm saw gross sales fall 26% from a comparative figure in a similar period.
The firm blamed the decline on a challenging consumer environment, which saw slumps in both August and September.
DFS did not update the market which actual sales figure for the periods mentioned, however they did report a fall which will concern shareholders.
The company said forecast profit before tax and brand amortisation for the financial year ending June 28 remains in line with market expectations at £51.2 million, up from £50.2 million in financial 2019.
DFS alluded to the wider economic and political complications which are currently haunting British retail, joining firms such as Asda who are owned by Walmart (NYSE:WMT).
DFS said “We are mindful of the broader political and economic uncertainty that still exists. However, we have made good progress on our strategic initiatives, driving showroom conversion and online growth. Furthermore, we have appropriate cost saving actions in place to help mitigate continued market weakness.”
“It is worth reiterating that the Group has historically capitalized on adverse trading conditions to buildmarket position and we continue to believe that our cash generation and long-term growth prospects will drive attractive returns for our shareholders.”
The Group will announce its interim results for the period ending 29 December 2019 on 10 March 2020.
Competitors see mixed results
London listed Dunelm (LON:DNLM) have reported sales and margin growth in the second half of its financial year. The firm alluded to strong growth across the total retail system, as such total sales growth including new stores was 6.2% higher in the second quarter. The company also impressively noted that gross margin improve by 110 basis points in the second quarter, mainly due to sourcing gains and lower product markdowns. Margin improvements were made across all product categories, Dunelm said. The FTSE 250 constituent expects pretax profit for the first half to total £83 million after adjusting for the impact of the new accounting standard IFRS 16. In the first half of financial 2019, Dunelm’s pretax profit was £70 million. The company added that the regulation of IFRS 16 reduced pretax profit by £1.3 million in the first half of financial 20. Another competitor in Laura Ashley (LON:ALY) who also provide homeware have struggled over the last few months. The homeware and clothing retailer said that, for the 52 weeks to 30 June, statutory loss before tax amounted to £14.3 million. The primary causes for the year-on-year drop in profit are the underperformance of Home Furnishing and its website after a re-platforming exercise last November. Total like-for-like retail sales were down 3.5%, whilst total group sales reached £232.5 million, down from the £257.2 million figure recorded for 2018. DFS are not the only firm that have been hit by a slipping retail market, however shareholders will hope that the firm can come to a resolution to fight market slumps and make 2020 a successful trading year.Games Workshop continue the fine form as shares jump over 4%
Games Workshop Group PLC (LON:GAW) have seen their shares jump on Tuesday as the firm saw a strong period of trading.
The firm said that it was pleased with its interim performance as it recorded a record rise in revenue and profits.
For the six months to December 1, the war-games manufacturer and retailer posted revenue of £148.4 million, up 19% from £125.2 million the previous year.
Pretax profit increased 44% year-on-year to £58.6 million from £40.8 million.
The firm saw impressive growth in its trade unit, with a 24% rise in first half sales to £76.1 million, as retail rose 6.3% to £45.3 million.
The shift to online retailing was also impressive for Games Workshop as online sales rose 14% to £24.2 million.
The firm also opened 19 stores including relocations, and closed seven stores.
The firms total portfolio remains at 529 stores.
On a good note for shareholders, the company declared a dividend of 45 pence per share which is payable on March 2.
Kevin Rountree, CEO of Games Workshop, said: “Our business and the Warhammer Hobby continue to be in great shape.
We are pleased to once again report record sales and profit levels in the period. The global team have worked their socks off to deliver these great results. My thanks go out to them all. Sales for the month of December are in line with our expectations.”
“We are also announcing that the Board has today declared a dividend of 45 pence per share, in line with the Company’s policy of distributing truly surplus cash.”
Shares of Games Workshop jumped 4.31% to 6,679p. 14/1/20 11:30BST.
Games Workshop see a strong period of trading
In November, the firm once again saw their shares surge amidst strong profit speculations.
For the six months trading period ending December 2, Games Workshop expects pretax profit to be no less than £55 million, and sales to be at least £140 million.
This shows a 34% rise from £40.8 million pretax profit, and an 11% climb from £125.2 million in revenue the year before.
The update arrived on the back of ongoing momentum in recent months, with royalty growth driven by the ‘timing of guarantee income on signing new licences,’ Games Workshop said.
The statement said: “Following on from the group’s update in September, trading to 3 November 2019 has continued well.
Grafton see better trading in November and December in “subdued” market
Grafton Group Plc (LON:GFTU) have said that their trading in November and December has been better than expected in an update on Tuesday.
Grafton said that the home building and property market still remains “subdued”.
The building materials supplier expects to report adjusted operating profit of about £202 million for 2019, compared to £194.5 million in 2018.
The firm added that it expects 2019 revenue from continuing operations to be £2.67 billion, a stat which will please shareholders.
In the first half, Grafton totaled revenues of £1.44 billion from current operations, however the firm noted the sale of its specialist UK plumbing and heating business Plumbase and its Belgian Merchanting unit.
Daily like for like revenue is expected to climb 1.9% higher in 2019, compared to one year ago. However fourth quarter like for like revenue did slip 1.8%.
In the UK Grafton remained cautious in a property market which had been hit by both political and economic shocks.
The weak markets of September and October continued into November and December but did not deteriorate further, Grafton noted.
Grafton’s Merchanting unit in Ireland saw volumes recover in November, with its Chadwicks business ended the year on a “firm note”.
Gavin Slark, Chief Executive Officer of Grafton Group plc commented today:
“2019 was a year of significant strategic progress with the acquisition of Polvo in July which increased our scale and consolidated our market leading position in the Netherlands. We also reshaped our portfolio of businesses with the successful disposal of Plumbase and the Belgian Merchanting business in October. “
“While we remain cautious about the timing of any recovery in the UK merchanting market at this very early stage in the New Year, our expectations for 2020 are positive for the overall Group and we are optimistic about growth opportunities. We are well placed to continue to successfully implement our development strategy supported by very cash generative businesses and a strong balance sheet.”
Progress from October update
In October, the firm issued a statement warning shareholders that profits may be significantly lower than expected.
Grafton announced they would miss annual profit expectations as the UK construction sector comes to grips with Brexit uncertainties.
The Irish company added that trading had been slow despite a good performance in the home market.
Additionally, Grafton said that demand for materials has been hit by legislation in the Netherlands, with limits Nitrogen emissions. This has delayed the granting of permits for new construction periods.
Grafton operate across the the merchanting, retailing and manufacturing sectors have speculated full year profits of £193.5 million, significantly lower than expected.
The FTSE250 company concluded, that there was signs of recovery with an encouraging start, but trading towards the end of the quarter had been impacted by sombre activity.
How are competitors performing?
B&Q who are owned by Kingfisher plc (LON:KGF) have also seen a tough time of trading over the last few months.
The FTSE 100 listed firm said trading in the three months to October was “disappointing”, with sales falling 3.7% to £2.96 billion.
Like-for-like revenue slipped 3.7%. Kingfisher said this “reflects continuing disruption from new range implementations, lower promotional activity and ongoing operational challenges in France, and softer market conditions in our main markets”.
B&Q sales sank 3.5% year on year to £820 million, slightly offset by an eight per cent rise in Screwfix sales to £477 million.
Additonally, Barratt Developments (LON:BDEV) reported lower sales and a fall in the value of homes sold in their October trading update.
Barratt have said they expect the volume of house sales to grow toward the end of the of their medium-long term target range of 3-5% annually.
Total sales rose to 12,963 units from 12,903 earlier this year.
However, this was offset by a fall in the value of these homes by 2.4% to £3.07 billion.
Interest rates are still low by historical standards, giving an opportunity for new homeowners to pounce on this opportunity.
Looking at the state of the property market, Grafton have performed relatively well and shareholders should not be too worried as political uncertainties continue to hit the property market.
Shares in Grafton trade at 899p (+4.84%). 14/1/20 11:16BST.
AnaCap invests in Parisian redevelopment project
French private equity firm AnaCap Financial Partners announced on Tuesday that it had invested in a newbuild Grade A office in Paris.
The acquisition is being made through an off-plan forward contract of the 16,300 square metre asset in Bobigny. This allows the company to add a presence within the active Paris property market, which currently has a vacancy rate of 1.8%.
The building was designed by Leclercq Associés and developed by BNP Paribas Immobilier Promotion (ENP: BNP) and GA Smart Building. It serves as part of a wider redevelopment project in Bobigny, with plans for 140,000 square metres of office, 1,380 new residential units, 8,000 square meters of public services and 20,000 square metres of public space as ‘tenants seek larger scale, affordable properties close to the centre of Paris’.
It is located near Bobigny metro, and is expected to enjoy access to three further transportation lines by 2025.
AnaCap comments
Sébastien Wigdo, Investment Director at AnaCap Financial Partners, stated, “This investment represents the opportunity to develop a high-quality property adjacent to a Paris metro station, in an emerging area that is enjoying a meaningful transformation. It is also part of our strategy to continue to build upon AnaCap’s well established investment track record in both France and more broadly across Europe by carefully selecting assets which we believe offer exceptional risk-adjusted returns.” Elsewhere in property; Schroder Real Estate Investment Trust (LON: SREI) disposes of its lower yield assets, Land Securities Group plc (LON: LAND) posted underwhelming financial results, Shaftesbury plc (LON: SHB) booked robust leasing activity and Berkeley Group Holdings Ltd (LON: BKG) restated its confidence in the South-East market.Boohoo shares spike over 5% after annual guidance is lifted
Boohoo (LON: BOO) have once again pulled out an impressive set of results in their update on Tuesday morning.
The firm updated the market this morning saying that it has raised its annual guidance following strong revenue growth.
Also in the update, the firm said that it had appointed former JD Sports (LON:JD) chief financial officer as its new deputy chair.
Brian Small, will take up this position with immediate effect having held executive positions at Mothercare (LON:MTC) and Pendragon (LON:PDG).
For the four month period, which ended on December 31, the firm said that its revenue had jumped 44% to £473.7 million from the £328.2 a year ago.
Boohoo said that it expects revenue growth for its financial year, which ends on February 29 to be between 40% and 42% ahead of their previous guided range of 33% to 38%.
The firm added that t expects adjusted earnings before interest, taxes, depreciation and amortisation margin to be 10% to 10.2%, beating its previous guidance of around 10%.
John Lyttle, CEO, commented:
“I am delighted to report the group has enjoyed record trading in the last four months of 2019. All of our brands have performed exceptionally well and delivered strong market share gains. We have continued to see operating leverage in our more established brands, and will continue to invest into them and our newly-acquired brands. The newly-acquired brands, MissPap, Karen Millen and Coast, are showing great promise and open different target markets for the group, in line with our strategy to build our multi-brand platform.”
Analysts have praised BooHoo for their performance in a market which seems to be slumping.
John Woolfitt, Director of Trading at Atlantic Capital Markets:
“Its not all doom and gloom for retail, well at least not if you are operating online. The fast fashion king Boohoo has today hiked guidance after a record quarter and investors will be pleased with the progress the group has made in 2019.”
“The integration of new acquisitions such as Miss Pap, Karen Millen and Coast will add to earnings potential over the coming year to build on what has been a very successful festive trading period.”
“Investors will take results from Boohoo as additional confirmation that if you are investing in the UK retail sector, you have to focus on the online retailers.”
Boohoo only get stronger
Boohoo have gained strength and consolidated their position in the fashion wear industry. Just over a month ago, the firm saw their shares soar following reports of record number sales across the Black Friday weekend. Boohoo said that it saw a record performance over the Black Friday weekend, as trading since the half year period had remained strong. “Both warehouses have had a strong operational performance,” the online fashion retailer added. Boohoo said: “Our new brands, Karen Millen, Coast, and MissPap, have been successfully integrated onto our platform. Initial ranges have been very well received, and we continue to broaden our product ranges as we progress our multi-brand strategy.” In the year to the end of February, boohoo reported 38% growth in pretax profit to £59.9 million, as revenue rose 48% to £856.9 million. Revenue growth across all territories and brands was strong, the company noted, with UK revenue up 37% and international revenue up 64%. Boohoo are continuing to defy the odds and theories which suggests that the retail market is slumping, and shareholders will only be getting more and more impressed with the firms performance. Shares in Boohoo trade at 334p (+5.19%). 14/1/20 10:56BST.Markets unphased by US-China trade deal progress
Markets dipped slightly on Tuesday morning, despite what appeared to be a warming up of good sentiments between the US and China, and the expected passing of the first phase of a trade deal. Progress was largely priced in by markets, and thus the news didn’t have quite the impact it would have done a few months ago.
The good news stories this morning came from the FTSE, which was able to outperform its counterparts following a disheartening GDP reading on Monday, which pushed Sterling down.
Elsewhere, Boohoo (LON: BOO) saw its revenues bounce 44% during the final four months of 2019, which saw the online fashion retailer buck the cheerless trend set by its peers.
Elsewhere in retail and the highstreet, Christmas proved costly; Marks and Spencer (LON:MKS) issued an underwhelming update, Tesco (LON: TSCO) suffered in Europe though it reported a potential sale of its Asian business, and Sainsbury’s (LON:SBRY) saw a drop in quarterly sales.
Speaking on trade deal progress and the morning’s updates, Spreadex Financial Analyst Connor Campbell stated,
“The markets didn’t really get anything from the newly revealed details of the US-China trade deal, instead drifting lower after the bell.”
“With the agreement all ready to be signed tomorrow, Washington removed the ‘currency manipulator’ label from China – a symbolic gesture rather than tangible one, but nevertheless another example of thawing relationships between the two superpowers.”
“This helped send the yuan to a 5-month high, but did little for the Western indices. Instead the DAX and CAC fell 0.5% apiece, with the Dow Jones set to drop 0.4% later this afternoon. The FTSE avoided the same kind of losses, though was still down a handful of points.”
“The trouble is, the positive aspects of the trade deal are pretty thoroughly priced in. In contrast, any rogue comments from Donald Trump in the coming days – especially those related to ‘phase two’, if the US and China ever get to that point – may then have a disproportionate impact on the markets, good or bad.”
“The reason the FTSE was able to outperform its peers was the continued weakening of sterling. The pound lost another 0.2% against dollar and euro alike, the ongoing speculation of an incoming interest rate cut, heightened by Monday’s dreadful GDP reading, weighing on the currency.”
“It was, broadly, a terrible Christmas for UK retailers. However, as is often the case, boohoo managed to buck the trends that have afflicted its high street peers, crying tears of joy after a record quarter. For the 4 months to the end of 2019 revenue jumped 44%, causing it to lift its forecast growth for the year to 40-42% against previous estimates of 33-39%. That increase was enough to send the stock to a fresh all-time high, the fashion brand rising 3.3% to strike £3.28.”
Taylor Wimpey expect results to be steady following turbulent 2019
Taylor Wimpey plc (LON:TW) have told the market that they expect their results to be in line with expectations.
The firm had alluded to both political and economic complications across the 2019 trading year, as the property market was hit by external shocks.
The FTSE 100 trader said that the housing market remained stable in the last year, however there were challenges faced in London and the South East.
Taylor Wimpey noted that total house completions in 2019 has increased by 5% to 15,719 which included joint ventures.
“While 2020 will continue to be a year of change for the UK, we welcome the increased political stability following the general election,” the company said.
“We start the year with a strong order book and continue to target a smoother profile of completions throughout the year but expect 2020 to continue to be second half weighted,” the housebuilder said.
2019 ended with a record total order book valued at £2.17 million, which showed a ruse from the £1.78 figure a year ago.
The house builder said that it remains cash generative and intends to return £610 million to shareholders in a dividend form.
Pete Redfern, Chief Executive, commented:
“Our results for the year to 31 December 2019 will be in line with our expectations. Despite an uncertain political and economic backdrop in 2019, we have continued to experience a good level of demand for our homes and trading in the second half of the year was as anticipated. The Group has again delivered a record sales rate and we increased home completions by c.5% in the year.
In 2019, our focus was on strengthening the long term sustainability of the business, further improving our build quality and customer offering, as well as increasing operating capacity and flexibility. In 2020, we will continue with these initiatives and will also prioritise a renewed cost focus and process simplification improvements.”
Operating profit for the period was down 9.4% to £311.9 million, however this was attributed to higher build costs and geographic mix.
Market analysts have been somewhat impressed with the performance of Taylor Wimpey, which will please shareholders.
John Woolfitt, Director of Trading at Atlantic Capital Markets commented
“Today’s figures show, that despite political uncertainty, the sector is still performing well. Record sales rates for Taylor Wimpey and an increase in home completions all bode well for the builder’s shares which are shaking off any concerns over slowing house prices.”
“This, and a positive outcome for the conservatives in the December election, has also led to further upgrades for the whole sector and a positive outlook for the year ahead.”
“Dividends increased significantly to £600m in 2019 and although dividends are not set to jump to the same degree in 2020, investors can look forward to a similar payout of around £610m from Taylor Wimpey in the year ahead.“Wimpey build from November
In November, the firm reported strong demand in their second half update.
Taylor Wimpey did warn homebuilders about potential rising costs in 2020, however in the Wednesday statement, the firm speculated that cost inflation may reduce in 2020 instead.
The FTSE 100 listed home builder, reported a 12.5% rise in its orders, to £2.7 billion as it exploited strong demand coupled with lower interest rates and the governments Help to Buy scheme boosting demand.
Total order book, excluding joint ventures, stood at 10,433 homes as at November 10 from 9,843 homes a year earlier.
The Homebuilding market – Boris Bounce wears off
Just as the election results were hitting news headlines on 13th December, many of the British Home builders saw their shares in green.
Notable rises came from Berkeley Group Holdings PLC (LON:BKG) whose shares spiked 13.06%, whilst Barratt Developments Plc (LON: BDEV) shares rose 12.52% to 755p.
MJ Gleeson (LON:GLE) updated the market last week saying that they remained confident in a home building market that was still facing uncertainty.
The householder said that its Homes unit had sold 811 units during the half year period to end 2019, which saw a 17% climb year on year from the 691 figure.
Additionally, Gleeson said that the demand for its low cost homes remains strong and is on track to deliver full-year unit completions in line with expectations.
For financial 2019, the firm reported pretax profit of £41.2 million, which showed growth by 11% from the £37 million a year ago.
The results today posted by Taylor Wimpey are impressive, and shareholders will be keen to see how 2020 unfolds as the Brexit negotiations take their turn and hopefully many political uncertainties are cleared.
Shares of Taylor Wimpey trade at 205p (+1.88%). 14/1/20 10:34BST.