Taylor Wimpey plc

Good morning, everyone, and thank you for joining us expertly this morning. As usual, I'm joined by Chris Carney, our Group Finance Director. So I'll start this morning with a few very brief comments, none of which I think will come as a surprise to you, and then we'll open up for Q&A. So I would like to start this morning by acknowledging the hard work and commitment of our team's who have helped us to deliver a resilient performance in what continues to be a challenging housing market backdrop. We are pleased with the sales rate, which reflects the locational quality of our sites, supporting our sales efforts. And we continue to demonstrate that Taylor Wimpey is a strong and agile business with high-quality products and locations, underpinned by an excellent land bank and robust balance sheet. As I said, I think this continues to be a challenging period for the housing sector. And while we've seen reductions in mortgage rates from the highs we saw over the summer, they continue to be elevated compared to recent years. And this, together with the broader cost of living pressures, continues to pose affordability challenges for our customers. Though mitigated, I think, to some degree by continuing wage growth. Despite this, it is worth, I think, reiterating that early customer inquiry activity remains strong, comparable to inquiry levels seen in 2019. So against this backdrop, we reported a year-to-date sales rate of 0.63 homes per outlet per week, which excluding the impact of bulk bills was 0.57. So far in the second half, our sales rate is 0.51 and excluding the impact of bulk bills is 0.48. Importantly, this isn't driven by price, which remains reasonably firm. And while incentives are being used to secure customer commitment, these continue to be well controlled. Joint valuations have remained low in the period. So overall, our sales teams are working hard and proactively with customers all along the customer journey. Moving on to land, I think you'll have seen from the statement that we continue to be cautious in our approach benefiting from our strong land bank and high-quality locations, positioning us very well. The current land environment continues to show few signs of the sort of value movements which would encourage us back to the land market in any meaningful way, given the current trading conditions. That said, we own and control all of the land for 2024 and have planning in place for the vast majority. We've already started on site on 37 future outlets, which are due to open the end of this year and the first half of next year, and continue to make good progress on others. You'll have seen that we're reiterating our guidance for the year of 10,000 to 10,500 UK completions, but now expect group operating profit to be at the top end of our guidance range of 440 to 470 million. This is because of our focus on optimising prices and sharp cost discipline. Looking to next year, the sales environment remains uncertain and the operating environment tough, with second staircase and new building safety procedures delaying progress on high-density sites, the failure of legislation to resolve neutrality constraint sites in the near term, and ongoing planning inertia more generally. While of course it is far too early to give guidance for 2024, you can see from our statement that we will come into the year with a reduced order book compared to our position last year. This will, of course, impact us next year. But overall, our ethos remains, that is, to protect value, as we have discussed many times before. As always, we at Taylor Wimpey recognize the value of our partners and of supporting each other through challenging times and ensuring that we are ready for recoveries. Our teams continue to be in the detail with our suppliers and subcontractors to find ways both sides can work together more efficiently and challenge cost fairly. I think it's pleasing that we do see bill cost inflation continuing to abate as a result of these actions and, of course, the wider environment. A good example of this is as part of our annual sales spec review, we have engaged extensively with with our suppliers and contractors and align this to the increased customer insights that we have now and which we've spoken about in the past. We've challenged ourselves to ensure our customer offering continues to be of the high quality and specification value by our customers, whilst at the same time targeting cost savings. We will continue to work hard to manage the business tightly against the current market backdrop, but also put the business in the best possible position to optimize performance in all market conditions. And because our strong balance sheet, excellent land bank, and highly experienced teams, we have choices. We have a differentiated dividend policy to return 7.5% net assets to give investors increased visibility. And as I said earlier, our focus in the short term remains on tight cost control and protecting values. While the short-term market is challenging the sector, there's no doubt that the UK housing market remains an extremely attractive market with the opportunity to deliver much-needed homes in an undersupplied market in the medium and long term. So hopefully that's given you a bit of an overview and quite happy to go to questions.

The first question comes from Will Jones at Redburn Atlantic. Please go ahead. Thanks.

Morning. Morning. A couple from me, please, if I can. First, just maybe exploring recent trading, if that's okay. We had a seminar earlier in the week talking about more customer positivity in October specifically. Just wondered if you've noticed any changes as you've gone through autumn. Do you see any difference, I guess, October relative to September, or would you say it's been more consistent? I suppose to link to that as you look forward, just wondering how you're thinking about your bulk sales strategy as you exit this year and then into next as well. And then the second main one was released around build costs. I think you've mentioned abating inflation, but just wondering to what extent you're managing to achieve any absolute gains as you push back on the supply chain.