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Taylor Wimpey recommended as a ‘buy’ following upbeat trading update

12th January 2015 Print

As Taylor Wimpey updates the market Helal Miah, investment research analyst at The Share Centre, explains what it means for investors.

“In a trading update this morning, Taylor Wimpey reported that it had a very good year in 2014 and expects the housing market in 2015 to return to more balanced conditions. Total completions for 2014 rose by 6% to 12,454, with average prices rising by 12% to £213,000. This commentary is not too dissimilar to other house builders in the sector.

“The company entered 2015 with a record order book, which increased in value by 12% to £1.397bn. It believes it is currently at its optimal size in terms of the amount of plots it has acquired and owns. Furthermore, the group expect to improve the operation margin by 400 basis points and currently sit on a cash balance of £113m.

“Although 2015 may not be as successful as 2014, we recommend Taylor Wimpey as a ‘buy’ for medium risk investors. The expectation of a moderation in the housing market should lead to a more sustainable growth rate, which will still be supported by government policies and the demand for housing.”