Taylor Wimpey plc

Good morning and welcome. Thank you for coming today. So as usual, I'll take you through the very brief highlights of 2024 before handing over to Chris, who'll do a more thorough job around the results. I'll then spend some time talking to you about what we're seeing on the ground in current trading and how we've set the business up to perform well for the year and beyond. So I'm very pleased with our 2024 performance delivering what we said we would. I'll kick off just by giving you a few of the highlights here. I'm particularly delighted that we have delivered our results whilst achieving the highest construction quality scores, customer scores and overall build quality we've ever had at Taylor Wimpey. And I'd like to thank all of our teams and subcontractors across the group for their hard work in achieving these results. It's also been a year of reliable dividend payouts for our shareholders whilst maintaining a strong balance sheet, demonstrating the way that we manage the business through the cycle. And as you already know, we are exiting the year with a strong land bank of 79,000 plots, which means that we start the year from a position of strength and are poised to take advantage of the opportunities brought by the improving planning policy background. So I know it is early days and it will take time to flow into the market, but it's a strong and welcome direction of travel. So I showed you a similar graph to this last year and I've just extended it to two years so that you can see the impact of borrowing costs on sales rates. And this time I've excluded the bulks just to give you a clearer picture. While continuing to track the mortgage rate, you can see that fluctuations in rates have had less of an impact on monthly sales rates during 2024. There have, of course, been pinch points on affordability, as we saw in 2023, but at current levels, we see an increasing number of people able to transact, whilst the smaller movements in volatility in rates have not particularly moved the dial. Affordability does remain a challenge for many, especially from first-time buyers, but given where we've come from, it is all moving in the right direction. I'll touch upon our customer behaviour later, but given the backdrop, we're very pleased with the 0.75 sales rate that we achieved, which includes only a small amount of pre-planned bulks. The rate, I think, underpins how we're feeling about the resilience of our customer and the underlying demand picture, which you can see in the improved order book, which is meaningfully up on last year. And with that, I'll now hand over to Chris. Thank you.

Good morning, everyone. In 2024, we delivered what we said we would. Despite starting the year with a lower order book and navigating mixed market conditions, we achieved a good set of results in line with expectations. As Jenny mentioned, we're particularly pleased with the UK sales rate of 0.75, which is 21% ahead of 2023. And this not only allowed us to reach group completions of 10,593 in 2024, but also enabled us to enter 2025 with a much stronger order book, positioning us well to improve on the 3.4 billion of revenue delivered in 2024. As you know, we are always very disciplined on cost, and as a result, we run a lean business. However, in any period where volumes and revenue are reducing, it is particularly important to have strong cost discipline to protect margin and returns. And I'm pleased we have demonstrated that discipline in 2024, delivering an operating profit of £416 million. The 2.6% reduction in tangible net asset value per share mainly relates to the additional £88 million fire safety provision we booked at the half year. Together with a £14 million charge in the second half relating to the exit from our joint venture with Wandsworth Council, both of these items are treated as exceptional and the other results on this slide are shown before exceptional items. The quality and location of our sites combined with the work we have done in marketing and sales targeting to improve the quality of our leads helps us to achieve stronger sales rates in every quarter of 2024 compared to 2023. And this enabled us to deliver 9,972 UK completions towards the upper end of our 9,500 to 10,000 guidance range. And the blended average selling price was £319,000, also in line with our guidance. The 3.8% reduction in private pricing was mostly related to mix, along with some underlying deflation, mainly on half-won completions. As noted previously, the increase in affordable prices is the result of improvements to mix in geography, size and tenure. Looking forward into this year, we are confident in our ability to grow volume and expect it to be weighted 45-55 in favour of the second half, similar to 2024. For average selling prices in 2025, I expect the negative mix effect on private pricing observed in 2024 to reverse, along with a slight reversal of the positive mix effect on affordable pricing from 2024. Overall, Half One should see blended average selling prices increase to around £330,000, also assisted by slightly lower proportion of affordable units in the Half One mix. This slide aims to illustrate the various factors impacting the UK operating margin in 2024 compared to 2023. The impacts from house price inflation and bill cost inflation caused a reduction in the operating margin in 2024. However, you will note both are lower over the full year than those reported in half one because there was no year-on-year change in underlying pricing and bill cost for half two completions. The 0.5% impact from land bank evolution is the same as half one, consistent with starting to trade out of some of the sites acquired in the years after the Brexit referendum, when the land market was most benign. In most years, we have a small number of land sales, which tend to be individual phases of larger sites. Those sales, which are pre-planned, give us the opportunity to improve returns, reinvest the proceeds and diversify our land investments. Typically, land sales generate profit, but you wouldn't expect them to move the dial very much on margin. 2024 was different because our land sales generated a margin of around 60% and that improved the total UK operating margin by 50 basis points compared to 2023. Most of this benefit occurred in the first half, as we previously disclosed, and whilst there may be land sales in 2025, we are not expecting them to have a similar beneficial impact on margin. Looking forward into 2025, despite volume growth, we are expecting the half one operating margin to be lower than in half one 2024 for the following reasons. Firstly, we entered this year with an order book with underlying pricing on average 50 basis points lower year on year. And whilst we've seen some gradual improvement in pricing in the first eight weeks of this year, those plots in the opening order book with lower underlying pricing will flow through into completions in half one. Secondly, we aren't expecting land sales to have a similar beneficial impact on the margin in half one 2025. So that is a 50 basis point reduction year on year and 100 basis point reduction half on half. Lastly, as flagged in January, we observed signs of bill cost inflation returning. We now anticipate this inflation to be low single digits for 2025, primarily driven by material costs. The impact on half one will be limited, as the opening work in progress position includes very little year-on-year inflation. However, there will still be some impact in the first half, albeit at low levels. Looking further forward into half two, it will be the pace at which interest rates reduce and how that plays through to affordability and consumer confidence, which will determine the scope for capturing improvements to house prices and in turn the trajectory of margins. So, along with hitting our income statement guidance, I'm very pleased that we've maintained a strong balance sheet and continued to invest in the business to prepare for growth. For the previous four year ends, we have reported a net cash balance in excess of our land creditors' balance, and this was an intentionally conservative balance sheet position, which reflected the degree of market volatility and uncertainty in the outlook. As inflation and interest rates have reduced and the market backdrop has improved, we are confident in delivering sustained growth starting in 2025. It is appropriate, therefore, to begin returning the business to a more normal and efficient balance sheet position with low levels of adjusted gearing. You can see we've increased our land and WIP holdings commensurate with a growth mindset. Over 65,000 plots in our short-term land bank are owned, which is 7% more than last year. And over 40,000 plots in the short-term land bank have detailed planning, which is 3% more than last year. So we start from a very strong position from which to drive growth with a total of 7.8 years of supply in our short-term land bank at current output levels. Most of the decrease in the long-term assets and JVs balance is due to the disposal of our Winstanley joint venture with Wandsworth Council. This mutual decision allows the Council to take a new approach to the regeneration scheme to prioritise the delivery of affordable housing on a standalone basis. The disposal generated a loss of 3.6 million and a cash inflow of 18.5. The increase in the provisions balance reflects the additional cladding provision booked in the first half, offset by spend and by the release of part of the provision to reflect it being recognised in our Greenwich Millennium Village joint venture in the period. And there's a slide in the appendices which provides the details on this. Turning to cash flow, this chart shows that the Group generated a very healthy amount of cash from operations and closed the year with a strong net cash position of £565 million. This is despite the investments made in land and WIP to drive future growth, which will increase the productivity of our 22 regional businesses in the UK and improve the asset turn. We noted in January that we are planning to open more outlets this year than in 2024, and although the openings are weighted towards the second half, there will be upfront infrastructure spend to achieve that in half one. I would also like to highlight the other category, which includes £29 million of spend on fire safety in 2024, which you can see in the footnote to the chart. And this is expected to increase to around £100 million in 2025, now that we have more remediation projects underway. Within that figure, we are also anticipating reimbursements to the Building Safety Fund in half one of approximately £31 million. Moving on to capital allocation, no changes here, but I would like to make a few points. Taylor Wimpey is committed to maintaining a strong balance sheet. As I mentioned earlier, we consider now to be the right point in the cycle to move towards a growth-oriented stance, and we do so from a position of strength, having successfully managed the balance sheet on a conservative footing through a period of tougher trading while continuing to pay a consistent dividend to shareholders. We can achieve growth and deliver improved asset and return on capital whilst maintaining our strong balance sheet and we remain committed to doing that. Our appetite for investment in land and WIP has and will continue to be driven by the quality of the returns those investments can deliver. The NPPF represents a very positive change to the outlook for the supply of consented land, but at this point supply remains constrained and there is strong competition for the sites that are out there. We don't need to invest heavily in land in 2025. in order to retain confidence in delivering growth in 2025 and 2026 and beyond. Because as I've already said, our short-term land bank provides a 7.8 year supply at current output levels. So we're not constrained by a choice between growth and value. We can be selective. And lastly, our ordinary dividend has consistently provided a reliable return to shareholders and we intend to continue to pay it through the cycle. So finally, turning to guidance, we came into 2025 with an improved order book and trading in the year-to-date has been ahead of the same period last year. So we are setting our UK volume guidance for 2025, excluding joint ventures at 10,400 to 10,800 completions, which represents growth of between 4% to 8% on 2024. As I mentioned earlier, we expect UK volumes to be weighted 45-55 in favour of the second half, similar to the delivery profile in 2024, and we expect the affordable mix to be around 20%. In terms of Group Operating Profit, assuming volumes around the middle of the guidance range, we expect performance to be in line with market expectations and current consensus is £444 million for Group Operating Profit including joint ventures. Net finance charges will shift to an expense of around £20 million in 2025, and this change is mainly due to a decrease in interest receivable resulting from lower average cash balances and reduced deposit rates. Additionally, we anticipate higher levels of imputed interest on land creditors, consistent with the increase in the land creditor balance. And finally, we expect around a 2 million share of profit from a similar level of JV completions in 2025. So in summary, I am very pleased with the group's performance in 2024, delivering a strong result in what was a challenging market. Looking forward, we are fully focused on leveraging our excellent land position to drive volume growth in 2025 and beyond, which will enable us to enhance our return on capital in the future. I'll hand you back to Jenny.

So before we get into how we're set up and our plans going forward, a brief look at the demand backdrop that we're facing into. I think it's been encouraging to see how supportive lenders have been and how they've maintained competitive rates, despite some macro noise and volatility in swap rates. And we can see from their efforts to hold rates where they can that they remain committed to mortgage lending, including in the new homes sector. Mortgage availability remains good at present, including an increased number of lenders offering higher 95% loan-to-value products. unemployment remains at lower levels, and for those with larger deposits, the cost of servicing a mortgage is lower than rental costs. So overall, we are confident that medium-term drivers are robust, underpinned by a strong desire for home ownership, significant structural underlying demand, and a resilient employment position. Our IFAs are reporting a higher percentage of first-time buyers in the mix, and lenders are keen to lend with good product availability with numerous new product and lender initiatives to improve affordability, most notably increasing borrowing limits for first-time buyers. Borrowing trends continue to reflect extended mortgage terms to support affordability and customers choosing fixed-rate mortgages. And finally, we haven't seen much of an impact as we might have hoped, but the increasing interest in energy efficiency and green mortgages, I think, will further support new build, given the considerable environmental advantages and lower running costs of new homes. So I've talked to you in the past about the sales funnel. The skill is in converting initial interest into actionable leads and from there to appointment and reservation. Whilst the improved market has had a positive impact on organic customer interest, which you will see on the next slide, we haven't been complacent. Our team has done quite a lot of work on improving the efficiency and user-friendliness of our website, as well as the quality of our website visits through a range of initiatives and incremental improvements in our approach to marketing and sales targeting. We've made a number of system changes and upgrades to every stage of the online experience. So we now have more targeted email communication benefiting from increased automation, and we have improved navigation and optimised the user journey through the website, including a streamlined appointments booking system. We've also reviewed and changed our approach to where and how we use advertising channels to increase the quality of website visits. As we anticipated, this does reduce total website visits by decreasing the number of per-quality visits. And as hoped, these changes have increased the conversion from website visit to inquiry and then appointment. So to put some numbers on that for you, In the first eight weeks of 2025, compared to the same period last year, our conversion rate from website visit to inquiry has increased by 7%. But more significantly, our conversion rate from website visit to appointment booked on the website has increased by 59%. This in turn is translating into an 11% increase in appointments booked via our website year on year and a 25% increase in web appointments per outlet year on year. And here are the familiar charts on customer interest. And as you can see, we have seen an increase in organic traffic, which is up by over 30% in the first eight weeks of 2025, compared to the same period last year, reflecting the improved backdrop, which is encouraging, of course, to see. Reflecting that quality optimisation effort that I mentioned earlier, you can see that the total website visits are down. You'll also see a noticeable dip on the graphs around weeks 29 to 34 and then subsequent improvement. There's a full explanation for this on the slide, but in short, it relates to platform changes undertaken at the time. While total appointments are down year on year, which captures a reduced walk-in rate, within that website booked appointments are up, which is what we expected from the changes that we had undertaken. And not to forget the all-important feedback from our sales teams who are corroborating the data, that the commitment and proceedability of prospective customers attending appointments has improved. which brings us nicely on to current trading. So you can see the year started off well from a sales perspective, with sales rates up 12% year on year, and I do use the term advisedly relative stability in the backdrop. So far, every week is up on the comparable, and you'll remember that this time last year was a fairly good period also, so I'm pleased with the business's performance thus far. This means that our total order book is up on last year, placing us in a good position to grow completions this year. It isn't easy. Our teams are continuing to work hard to grind out sales and incentives remain an important driver in gaining commitment to buy. And on affordable housing, whilst conditions for housing associations continue to be challenged when it comes to Section 106, we are in a good place for our 2025 affordable deliveries. Our campaign, Stop Waiting, Start Living, is landing well and the feedback from customers has been excellent, encapsulating as it does, I think, a message which is clearly resonating with them. There remains a strong desire for home ownership and a sense of not wanting to wait or put buying off indefinitely. There do remain regional differences in how the market is performing, as we outlined in January. And while things continue to improve in the north, around our London and south-east businesses in particular, things are feeling a bit tougher, given stretched affordability. Though confidence is good, affordability is pinched in some areas, and where average selling price is higher, chains tend to be longer and more fragile. Helpfully, though, we are seeing the cancellation rate evening out. Overall, the pricing picture has incrementally improved since the start of the year, and current pricing is now flat year on year. So I just wanted to remind you of how we have set ourselves up. Our strategy remains consistent based on our four strategic cornerstones of land, operational excellence, sustainability and capital allocation. This strategy enables us to respond and adapt quickly to changing market conditions, but also to position the business to drive sustained growth and returns for all stakeholders. In the next few slides, I'm going to show you a bit more colour on how we are set up for what is hopefully the next phase of the market and a return to sustained growth. I don't think any of you will be surprised to see that it starts with our excellent land bank, our continuing focus on driving operational performance, and then the wider measures throughout the business, all of which build our capacity for growth. So at the outset, I'm not going to make an apology for telling you yet again how great our land position is. As you know, this is a key for any house builder and everything flows from there. We have a strong and long land bank. In future years, we expect land bank years to drop as land conditions improve and volumes pick up. However, for now, having a slightly longer land bank through what we expect to be a transitional period remains an advantage. While our land bank is quite stable, we have increased our own share of the land bank by over 4,000 plots year on year, reflecting some underlying progress through the planning journey for a number of sites. Our strategic land and pipeline is and will remain a differentiator. I'll remind you of its maturity and that you can't get to this position overnight. We've invested in our team throughout the cycle, even in times when land flowed much more freely in the open market, and this consistency is why we are confident that we will continue to drive value from our strategic land in the coming years. The new MPPF is welcome news. And to reiterate, we're on the front foot with 26,500 plots for first principle planning already in the system. And that was as of the 31st of December. And there are more applications being prepared across our operational businesses and strategic land to follow this year. So you can see how well we are set up. The recent planning policy changes are excellent and are capable of delivering a step change in planning outcomes. However, we do continue to need increased resources and a focus on the implementation phase now to really drive the outcomes and the most recalcitrant into action. Overall, the Government's ambition is good news, though, and we are starting to see positive signs of this on the ground from the revised PPF. Changing the methodology of housing need and making targets mandatory, together with the presumption in favour of sustainable development, has already had a positive impact on a couple of recent decisions and appeals now, including applications that had initially met resistance and would, but for the changed environment, have been refused and gone to appeal. But whilst it's an improving picture, it is still a patchy one. Last year, we approved 12,000 plots and completed just under 10,000 plots in the UK. And as you know, we also benefited from a greater number of good value opportunities in the run-up to the budget in particular, many bringing forward high-quality deals on attractive terms that would otherwise have transacted in half one this year. We expect the land market to continue to be competitive during this transitional period before the full impact of the NPPF is felt. So the strong land bank in place, we will continue to be opportunistic if we see attractive opportunities in the land market, but we feel no pressure. And this is a slide we showed you last year, just outlining the depth of our portfolio. As you can see, there's good dispersion between small, medium and larger sites. This year, we'll continue to benefit from multi-year sites, meaning that we're not reliant for this year's openings for 2025 volumes. And as a reminder, we are already on all sites from which we expect to deliver 2025 completions. And as I've said before, we will open up more outlets in 2025 than we opened in 2024, which, though weighted towards the end of the year, will support volume growth beyond 2025. So moving on now to operational excellence, our approach here is very much part of the business culture now, but it's worth flagging some of the ways in which we are continuing to drive marginal gains and so stay ahead of the curve. This is a business-wide focus starting centrally with our procurement and partner strategies. The closer we can work with our suppliers, the more accurately we can drive our efficiencies improve forecasting and as a result drive better deals and deal structures. Our Value Improvement Program identifies opportunities for savings and productivity from our suppliers to achieve savings in a way that protects the quality for our customers and retains the quality of our technical specifications. So let me just give you an example or two on materials. There were clear areas such as brick and roof tile materials and colour palettes where we found savings by identifying different products with very similar attributes but with no lesser specification. And we also removed certain materials from supplier packages entirely where we can source these for better value directly, reducing costs. On productivity, our central logistics function remains key to our strategy and driving efficiencies through standardisation. We are also increasing the use of our standard house types, something that we've been driving throughout the business for a number of years, with standard house types now representing 94% of 2024 house completions. Telewimpy Logistics remains key to our approach to driving efficiencies through standardisation, and in the year we upgraded the Telewimpy Logistics warehouse management system to drive further efficiencies and ensure we are future fit. Overall, there are dozens of initiatives group-wide which, though marginal individually, combine to incrementally offset cost pressure. So we are, of course, always mindful of the regulatory backdrop and our approach is to prepare well ahead of changes wherever possible. And I think we're in a good place. Mitigating action is helped by our unwavering approach to health and safety, which is our number one priority. Our partnership approach when working with subcontractors, as well as a major focus we have placed on driving bill quality over recent years. We are expecting an update on the government's future home standards together with transitional arrangements in the summer. As you know, our Sudbury trial and other ongoing developments, we are well positioned to implement the necessary changes once the government's preferred approach is confirmed. The same is true for changes associated with the Building Safety Act. I would emphasise our excellent CQR scores here as evidence of how well we and our subcontractor base are placed in terms of build quality standards. Finally, in respect of the building safety levy, this is expected to be published in March with a six-month transitional period. There remains a number of unknowns here. However, we are working to prepare the business for these changes and to mitigate the impact insofar as will be possible on existing assets and to recognise the likely cost in ongoing and future land price negotiations. So we continue to look to the future and have been focused on prioritising a number of areas across the business which will ensure that we are fit for the future and prepare our business for the next phase of the cycle and the opportunity for growth. So first up, a reminder that we retain the capacity and the ambition to deliver higher volumes as the markets recover. Continuous business improvement is vital and will remain embedded in the way we work. Our timber frame factory is a key component in supporting efficiency and environmental performance. And though we have much to do, we are pleased with the progress and are already driving cost efficiency into this newest part of our business. We remain a business which values its people. And as we look to sustain growth, we are focused on attracting, retaining and developing the best people with an attractive and competitive offering for our employees. In developing our digital capabilities, we are focused on driving efficiency and productivity, freeing up employees to focus on areas of greater value to the business, such as scrutinising costs and value improvement. So we also launched Taylor Wimpey Innovate TW this year, which is a business-wide IT upgrade to further digitise the business, including the use of AI to free up time on repetitive tasks and allow our employees to focus on more value-adding activities. A good example of this can be seen in the business adoption of CoPilot, with early benefits being especially seen in the quality and speed of our customer service engagement. and we will continue to leverage technology to improve our efficiency and to share best practice across the group. And finally, we're really pleased that the spring selling season has started well with good levels of demand for our quality homes. We came into 2025 with an improved order book when compared to the prior year, which puts us in a strong position to continue to grind out value where there are opportunities to do so. With the private order book up 25% in volume, we are well set up for completion growth in 2025 and have remained focused on building our order book, which is now a total of 8,021 homes. We expect 2025 UK completions, excluding JVs, to be in the range of 10,400 to 10,800 homes, with approximately 45% occurring in the first half. It has been a challenging couple of years, but I think we have proven to be a strong and resilient business with a clear strategy to manage the cycle, focused on driving value and operational excellence while investing in the long-term success and sustainability of the business. we are now looking forward to opportunity. With an improved planning and market backdrop, we're in a great place with a strong balance sheet, excellent land bank, experienced teams to deliver sustained growth. So let's open up for questions. We'll start at the front and we'll work back.