Author Topic: Taylor Wimpey profits up 54% in 2014  (Read 3679 times)

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Taylor Wimpey profits up 54% in 2014
« on: March 05, 2015, 07:28:18 am »
Taylor Wimpey profits up 54% in 2014 with 35% Help to Buy sales
There has never been a better time to be a house builder, or for that matter to own shares in a house builder.
This government is committed to building more homes for "hard working British families" - whoever thought that one up!  And has been throwing taxpayers' money at the industry for several years through schemes such as Help to Buy and the latest pre election scheme, the 20% "discount" for under 40 first time buyers buying a new home on a brownfield site.

These schemes, along with a relaxation of planning requirements have enabled the house builders to announce record profits increases year on year. Not as a result of building more new homes, but from selling the few they do build at a higher price with fewer costly planning conditions such as social housing.

This week Taylor Wimpey joined the party announcing their results to 31 December 2014, the first full year of operation under the Help to Buy scheme. Unsurprisingly, operating profits are up 54% on the back of increasing average private selling prices, up 11.4% to £234,000 and turnover (sales) up 17% to £2,686million on 2013 figures. Around 35% of their sales in 2014 took advantage of the Help to Buy subsidy.

During the year Taylor Wimpey boosted their land hoarding by 8,315 plots, bringing their landbank total to over 75,000 plots. This represents around six years supply and may last even longer going by the meagre increase in the number of new homes built by the company in 2014, up just 758 on 2013 to 12,454, ending the year with 305 active developments. Only 17.5% of the new homes built by the company were affordable down from 18.2%.

Taylor Wimpey reported "Customer satisfaction at 87%" so will lose their 'five star' status when the star ratings are announced by the HBF in a week of two.  This is a clear indication that profit and numbers are put ahead of quality and customer service.  In a year when, with government taxpayer subsidies, Taylor Wimpey reported record profits, surely this was the time that some of this excess money should have been invested in improving quality of their new homes and defect prevention.

The house building industry prefers to spin rectifying defects and snagging works as "after sales customer service" rather than admit that it's really just compliance with a legal obligation to remedy breaches of their contractual duty to build the home in a good and workmanlike manner, with correct materials, in accordance with Building Regulations Warranty standards and planning requirements.

If this greedy industry continues to refuses to improve the quality of new homes it builds and the service to it's customers when it gets it wrong, then it should be forced to, by windfall tax levy on the excessive profits generated as a result of taxpayer funded schemes and participation withdrawn for those that have the worst record.
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