Taylor Wimpey Sees Order Volumes Falling In 2023

Taylor Wimpey (LON: TW.) dipped in the early part of Friday trading after the housebuilder said it expects order volumes to reduce in 2023.

The company said in a trading statement for the year ended December 31 that although it strengthened its outlet position in 2022, the ongoing market uncertainty means that sales “remain significantly below” levels seen before the rise in mortgage rates in the third quarter of 2022.

“Accordingly, we enter 2023 with a lower private order book than in recent years and we expect overall volumes to reduce in 2023,” Taylor Wimpey said.

During 2022, Taylor Wimpey said the business performed well due to its tight operational controls and selling price discipline, which led to an improved operating margin.

Completions for the full year were broadly in line with the prior year, although slightly lower at 14,154, down from 14,302 in 2021. The business expects to report 2022 full-year operating profit in line with expectations.

UK home completions, which include joint ventures, were 13,773, down from 14,087 in 2021. Meanwhile, the cancellation rate in 2022 was 18%, up from 14% last year. However, it climbed to 23% in the second half of the year, as rising mortgage rates impacted potential buyers.

The company said it ended the year with an order book valued at £1.94 billion million, a decline from last year's £2.55 billion.

“The business performed well in 2022, as our tight operational controls and price discipline led to an improved operating margin. Despite the economic and political backdrop through the second half,” said Taylor Wimpey CEO Jennie Daly. “Despite near-term uncertainty we remain confident that the medium to long-term fundamentals of our business remain highly attractive.”