Taylor Wimpey plc

Good morning to you all. We're going to start nice and sharp today because I know it's a really, really busy results day. But before I do, and it has become usual practice, we have members of our group management team with us here today. And also our first newly appointed customer experience director, Maria Sebastian. So Maria, give everybody a wave so they know who you are. and we will, hopefully, you'll have the opportunity to catch up with Maria later this morning. And while not, ah, there is Maria. Actually, you missed your moment, Maria. So here is Maria, our Customer Experience Director. And while not here today, I'm also pleased to say that we have appointed a new Divisional Chair for London and South East, Tom Pocock, formerly of Barclay. And Tom will be joining us soon and you'll no doubt meet through the course of the year. Right, let's get started. So I'll start with some highlights on 2025 and the delivery of the medium term targets we set out last October. And Chris will cover 2025 performance in more detail and turn to guidance. And then I'll update you on how the spring selling season is playing out and how we're driving the business forward with those medium term targets firmly in our sights. Here we go. So this morning you'll hear our strategy for driving returns and what has been a challenging year for the industry. Against that backdrop, we delivered 2025 volumes in line with guidance, growing completions by 6% with new outlet openings of 29% in the year, ending 2025 with 219 outlets ahead of expectations. The planning activity we created and stoked over the last three years has gained momentum through the year and is now delivering results in both applications submitted but more pleasingly in the rate of permissions granted. This is ultimately the basis for future outlet openings and you'll hear that we remain very confident in delivering average outlet growth year on year. Another key focus is utilising our strong existing land bank and increasing capital efficiency. Chris will speak more about this. It's not something that happens overnight, but we are well on that journey. Our strategy and the actions that we've been taking will drive improved returns, both in terms of margin and return on assets in the medium term. We have a continued focus on cost discipline, grinding out cost whilst protecting value, and balancing the medium-term strategy commitments. And while the housing market remains tough, we remain confident in this plan that is in our control and deliverable. And you'll hear more about this during the presentation. However, our outlook does not incorporate potential impacts from recent events in the Middle East that may arise for the UK economy and our business given the early stages of development. And finally, you will have seen that we've added flexibility to our capital allocation. Chris will talk you through the detail, but suffice to say that we remain confident that the unchanged quantum of net asset value-based returns remains appropriate, but do see benefits for shareholders in having more flexibility by adding the potential for a buyback element to our ordinary distributions. So this slide will be a bit more familiar to you and get a bit more into the guts of our 2025 performance. I won't run through them all but I'll just pull out a couple of the highlights. We delivered a robust sales rate which I think attests to the quality of our product and locations and the efforts of our teams. Turning now to land bank, you can see that our land bank has come down slightly as planned as we seek to reduce land bank years. This is a key objective for us given the strong land bank that we hold, though we will do so principally by growing volumes. We've continued to prioritise customer scores and build quality as part of our commitment to operational excellence. We have a high customer score, comfortably above the five-star threshold under the new survey criteria, and our build quality continues to lead the sector. I'm delighted that for the second consecutive year and the third in five years, a Chattahoochee site manager was awarded the Supreme Award in the NHBC House Builders Award. This year, congratulations go to Lee Doing of our North Yorkshire business. So you'll have already seen most of the key numbers on the slide through the trading statement, but I'll just highlight the outlet chart, which I think illustrates the progress that we are making in outlet openings. We opened 71 outlets last year, 29% up from 2024, with good progress year on year. There's some good momentum here and we remain very much on track. We expect to open more outlets in 2026 than we did in 2025 and remain confident in growing average outlet numbers year on year. I think it is worth reminding you what we said about our approach to outlets. We have a strong single brand and we mostly run our sites as single outlets. So this increase in outlets represents real growth in new markets. So I'll now hand over to Chris to take you through our performance and guidance in detail.

Thanks Jenny and good morning everyone. As usual I'll take you through the financial performance for 2025, a year in which the group delivered a robust set of results despite a challenging market backdrop. Our disciplined operational focus, the consistent execution of our strategy and the continued progress in planning and outlook openings underpins the financial resilience you'll see across the next few slides. So let me begin with the headline financials. Group revenue increased 13% to £3.84 billion, supported by growth in the UK completions, resilient private pricing, and a stronger contribution from land sales. Overall, a very good performance in the year where second-half sentiment softened. Gross profit was slightly higher at £658 million, with gross margin stepping down to 17.1%. This movement is consistent with the factors that we've been flagging throughout the year. Modest bill cost inflation, slightly lower opening order book pricing and the impact of land bank evolution. Adjusted operating profit was £421 million of 1% year on year, delivering an adjusted operating margin of 10.9%. And I'll come back to margin performance in more detail shortly. PBT and adjusted EPS were both lower year on year, reflecting higher net finance costs. And finally, return on net operating assets edged up to 11%, with improved asset turn more than offsetting the margin headwinds. Turning to the UK, we completed 10,614 homes, excluding joint ventures, up 6.4% year on year, and in the middle of the guidance range we set a year ago. Private completions increased by 7.7%, while affordable completions increased by almost 2%. Affordable represented 21% of total completions and we expect a similar mix of around 20-21% in 2026. The blended UK average selling price was £335,000 with the private average selling price at £374,000, both about 5% higher. This reflects a greater proportion of completions in London and the South. Underlying pricing was positive in the north and became progressively softer as you moved down the country, but overall remained reasonably resilient. As we entered 2026, underlying pricing in the old book was roughly 0.5% lower year on year, primarily due to those late year bulk deals in London that we highlighted in the January trading update. After taking that into account, we expect mixed benefits to support an increase in the 2026 blended average selling price of around 2% over the $335,000 reported for 2025. Adjusted UK operating profit remained steady at £369 million, while margins softened to 10.1%. On the next slide, I'll walk you through the main drivers of the 1.4 percentage point operating margin reduction. So in 2025 we saw modest market driven pressures from both pricing and bill cost which together reduced adjusted operating margin by 110 basis points. On pricing the pressure came from the opening 2025 order book and the London bulk deals which contributed to completions in 2025 and formed part of the order book for 2026. Build cost inflation was about 0.5% in 2021 and 1% for the year overall, driven mainly by materials rather than labour. The underlying market rate was slightly higher, but our supply chain self-help initiatives and increasing usage of our new house-type ridge helped offset part of the pressure, and that work will continue into 2026. Land bank evolution was also a factor as we continued to trade out of older, higher margin sites acquired after the Brexit referendum. We still expect this to normalise and then become a positive contributor and, as we discussed in October, that improvement will start in 2027 and become more meaningful in 2028 and 2029. As we said in January, land sales were particularly strong in 2025, enhancing our group margin by roughly 60 basis points, a similar benefit to 2024. However, as we said, we don't expect land sales to be margin enhancing in 2026, so that benefit will unwind. We also had a 0.5 percentage point impact from the £20 million one-off charge relating to historic workmanship issues at a legacy London apartment scheme. So these two impacts dropping out will be broadly neutral going into 2026. The headwinds from pricing and bill cost inflation were partly offset by improved recovery of operating expenses as both volume and revenue grew. So turning to cladding and fire safety. This slide will look familiar to everyone from the half year and I'm pleased to say that the overall provision has remained broadly unchanged. That sits alongside strong operational progress. We've continued to move at pace, progressing assessments, initiating further works and we've now fully remediated 62 buildings. Since June, the number of buildings awaiting formal assessment has reduced by around half. There is still significant work ahead, but the stability of the provision over the past six months reinforces the robustness of the assumptions we updated in June. To date, we have set aside £544 million for cladding and fire safety remediation and spent £131 million. That leaves a remaining provision of £413 million Our cost estimates on assessed buildings, including the cavity barrier risks highlighted at the half year, have continued to prove robust. The small uplift you see reflects routine mechanics, the unwind of discounting, and minor updates to assumptions such as inflation and legal costs. Cash spend in 2025 was £49 million, around half our previous guidance, mainly due to the delayed invoicing from the Building Safety Fund. With those payments now expected this year, we anticipate around £150 million of cash outflow in 2026 and about £100 million in 2027, with remediation still expected to conclude in 2030. Our balance sheet remains a core strength of the business. Net operating assets were broadly flat at £3.8 billion. Land's net of land creditors reduced modestly, reflecting the contraction in the short-term land bank to 77,000 plots, consistent with progress towards the targets we set out in October. Work in progress increased year on year, supporting higher outlet numbers and continued infrastructure investment to support new outlet openings. Tangible net asset value per share declined to 117.6 pence, driven by the increase in the building safety provisions in the first half. Turning to cash flow then, this bridge shows the movement from opening to closing net cash. The working capital outflow reflects higher debtors due to the London bulk deals signed towards the end of the year and lower creditors mainly from reduced affordable advance receipts and customer deposits. The land decrease includes a higher level of deferred receipts on land sales and the increase in WIPs supports our outlook growth strategy as planning momentum improves. After tax, interest, dividends and other items we entered the year with a strong net cash position of £343 million in line with guidance provided at the half year. Now I've included this slide to reiterate a couple of points from our investor and analyst event in October as this is a critical focus for the business. Our medium term plan remains 14,000 UK completions, 4.5 to 5 years of short term land bank, 16 to 18% adjusted operating margin and return on net operating assets above 20%. Capital discipline across land and WIP is central to delivering those improved returns. In 2025, we made good progress, returning capital into smaller sites, reducing the scale of the land bank, increasing output numbers and improving the distribution of our investments across the country. The short-term owned and controlled land bank is now 77,000 plots, down from 79,000. The average approved site size reduced again in 2025 to 211 plots, compared to an average of 260 in the previous five years. And we closed the year with 219 outlets, up 3%. As we discussed in October, WIPP invested in both London and infrastructure will take time to normalise, but we're seeing early progress. WIP per outlet has improved since the half year and is now back in line with end of 2024 levels. London apartment WIP reduced from £270 million in June to £200 million and the £100 million of land sales completed in 2025 will release around £30 million of infrastructure capital for reinvestment to fuel future growth. So there was good progress in 2025, increasing confidence in our ability to deliver the returns set out in our medium term plan. Next, turning to our capital allocation priorities. Today we're announcing an evolution of our shareholder distribution policy, but before outlining the change, I think it's important to note the context. Taylor Wimpey is inherently highly cash generative through the cycle, and that cash continues to fund the consistent investment we make in land and work in progress to support future growth. That remains unchanged. As a result, the first two priorities of our framework stay exactly as they are. and in turning a strong balance sheet and investing in land and WIP to underpin sustainable long-term growth. We've been equally consistent in returning significant cash to shareholders. Since introducing our ordinary dividend policy in 2018, more than £2.8 billion has been returned. Our existing distribution policy, returning 7.5% of net assets, or at least $250 million each year through the cycle, also remains in place. What we're introducing today is an element of flexibility in how that amount is delivered. we will continue to return 7.5% of net assets, split equally between the final and interim. However, from here, a minimum of 5% of net assets will be paid as a regular ordinary dividend, with the remaining portion returned either by a dividend or share buyback to be determined by the Board as most appropriate at the time. This added flexibility strengthens the policy and supports the long-term interests of all shareholders. Accordingly, today we are announcing a final 2025 dividend of 2.95 pence per share, equivalent to £105 million, and a £52 million share buyback, which will commence shortly. Taken together, this brings total shareholder distributions for 2025 to £322 million, including the 2025 interim dividend. Finally, our fourth priority remains unchanged. We will return excess cash to shareholders when appropriate. So with the combination of good cash generation, a strong land bank and an invested WIT position giving us everything we need to support disciplined, profitable growth, it's clear that our long-standing commitment to funding the business first remains fully intact and this evolution in policy is built on that foundation. So finally, turning to guidance. As you would expect, we remain mindful of the broader geopolitical backdrop, including recent developments in the Middle East. Our outlook today reflects the conditions we see in our markets at present and does not incorporate any potential impact from those emerging events, given the uncertainty and the early stage of developments. With our strategic approach to land and strong conversion into outlets, we continue to expect average outlets to be higher in 2026 than in 2025. Trading in the year to date has been encouraging, although we did enter the year with a slightly lower order book. Against that backdrop, we are setting UK volume guidance excluding joint ventures at 10,600 to 11,000 completions for 2026. At our January trading update we covered the two main moving parts impacting adjusted operating margin in 2026 and I'll recap those now together with one further relevant factor for 2026. Pricing in the opening order book was around 0.5% lower year on year driven by bulk deals. We continue to see low single digit bill cost inflation. and legal completions in Spain are expected to normalise this year to around 350 to 400 after two years of higher than usual output. Taken together, these factors are a headwind to profit margin in 2026 relative to 2025, and we therefore expect adjusted operating profit of around £400 million, and we expect pre-exceptional net finance charges to be around £30 million. As we said in January, UK volumes in 2026 are likely to be more second half weighted than usual, with around 40% completing in half one, reflecting the softer market conditions in Q4 last year. Given the half one, half two phasing effect, we anticipate a larger half one cash outflow than last year, resulting in around zero to 50 billion of net cash at the half year, with a half two weighting of completion supporting a recovery in the balance by the year end. So in summary, I'm pleased with the group's performance in 2025, a strong and resilient result despite a changeable market backdrop. Looking ahead, our focus is on leveraging our excellent land position to drive outlook growth, which in turn supports volume growth, margin progression and enhanced return to shareholders over time. I'll hand you back to Jenny.

So taking a step back then and looking at the market as a whole, we are pleased to see some signs of improvement and opportunity. Mortgage availability remains good with mortgage rates lower year on year and real wage growth support and affordability, though still more challenged than in the years before the downturn. Unemployment remains at low levels and although customer sentiment is lower generally, it has been on an improving trend. In addition to the budget uncertainty through much of the second half, last year was also impacted by a notable increase in the amount of second hand stock on the market. And although we hope for improvement this year, we're also ensuring that our customers are aware of the benefits of buying new. Encouragingly, first time buyer numbers are showing some signs of improvement but remain well below the levels we saw before the downturn. Deposit building remains a real challenge for this group, particularly in the affordability constrained south. On the Section 106 affordable housing side of the market, securing partners remains a challenge, but despite that we are in a good position for 2026 affordable deliveries. Overall, medium to long term drivers continue to look positive and as a result our medium to long term view of the market opportunity is unchanged. There is a long-term structural undersupply of homes in the UK. However, we also now have a political commitment to address undersupply with meaningful interventions to support supply-side bottlenecks such as planning and more on that later. So turning now to Taylor Wimpley and our focus on controlling what we can and driving value from it. A good example here is the performance that we're driving from our marketing platforms. Last year we updated you on how we changed our marketing approach to target fewer but higher quality leads and it's pleasing to see clear benefits of this. We've also improved the online experience for customers through optimizing media and website effectiveness. We are seeing good quality lead generation, a year-on-year increase in overall appointments, which is still the best indicator of future intention to purchase, and better conversion rates. And finally, we are seeing good quality visitors with a strong intention to move, but decisions are taking time, with customers visiting sites multiple times before commitment. Spring selling season is progressing well with our performance similar to this time last year, which you will remember as a strong comparator. The year to date net private sales rate compares well to this point last year. The last four weeks have been a bit stronger at 0.87 including bulks or 0.83 excluding bulks. And that compares to the same period in 2025, which was 0.82 with no bulks. Whilst this is encouraging, I think we should remain mindful of the weak trading in quarter four and that it is still early in the year. As we told you in January, our order book at the start of the year is a bit lower than the comparative period given the tougher trading environment that we saw in the second half of 2025. We had a strong Boxing Day sales campaign supported by proactive management actions and we can see that the appointments taken in this period are now converting into sales in recent weeks. As a result, the order book has made some progress and it currently stands at 7,678 homes compared to around 8,000 at the same time last year. As I said, customer sentiment is moving in the right direction. However, we are still seeing first-time buyers, especially those in the south, grappling with affordability constraints. As a result, incentives remain an important factor in gaining commitment and are running around 6%. Over the next few slides, we'll show you the progress that we're making in driving a more efficient land position and liberating our strategic land pipeline through our assertive planning strategy. We're still at the relatively early stages of the new planning cycle, but as expected, we've seen some early improvements in decision-making because of the changes introduced by the NPPF at the very end of 2024. These pie charts represent a snapshot of expected outcomes for our assertive strategic applications as at February 2025 and February 2026. I think if you want a stat that really shows the shift in sentiment, this is a good one. At this moment in time, we forecast 49% of planning officers will make a positive recommendation on our assertive applications. That's more than double the 22% we saw at the same point last year. I would stress that this is a point in time snapshot of what is a dynamic process, so as applications progress through the various stages of planning considerations, such as consultation stage, we would expect the not known categories to crystallise in some numbers towards the positive. With a clearer and more consistent planning policy backdrop weighted to housing delivery, our proactive strategy is delivering. This clarity means that we are being more determinative in our approach to engagement at a local level. It also means that we are more confident in a positive appeal outcome than in past years and we are choosing this route more quickly when local engagement routes are exhausted. And not on the slide, but in terms of overall applications, sentiment has visibly improved with positive planning progress or planning achieved on 71% of applications in 2025 compared to 58% the prior year. So against this positive and improving backdrop, how are we faring? So you will recall that I've been telling you for some time that we've had a very deliberate and targeted strategy since 2023 to get ahead, load the planning basis and now we are seeing results. We achieved detailed planning for over 10,000 plots in 2025, a 28% increase year on year. On the chart that you can see on the left, while some of those applications have been in the system since 2023, many more were submitted more recently and have benefited from early progress following the MPPF. We also converted over 5,000 plots from the strategic pipeline in the year, not unexpectedly weighted to the second half and final quarter. Additionally, plots for first principal planning determination are continuing to increase, now standing around 32,000 plots, and we are progressing them through planning at a pleasing rate. At the investor and analyst update we set out a number of assertive applications that we intended to submit from our strategic land pipeline. Just to stress, these applications are over and above our business as usual planning activity. In October, we expected to submit 52 applications in 2025, compared to 20 in 2024, or around 11,500 plots. I'm pleased to say that our teams have worked hard and hit the application target, surpassing the plot count alone. In October we also talked about 17 assertive applications being targeted for committee decisions. This was a stretching target and whilst applications came in slightly below, in plot terms the numbers came in broadly in line and we have since had a number of those delayed applications go to planning committees in 2026. So all in all, I think it's a good showing relative to our experience in most recent years. All this is key to driving outlets and we're maintaining the momentum which we will see in the next slides. We start from a position of strength, a strong short-term land bank sitting at 77,000 plots, which continues to give us the confidence that we can deliver growth without net investment in land. Our intention in the land market in 2025 was to continue to be selective and below replacement. In the year, we approved around 8,000 plots, and as you heard from Chris already, the average site size of those approvals was around 211 plots, in line with our strategy to target smaller sites. And the geographic distribution approvals nudged in favour of our northern businesses. The land market remains uneven, but there are signs of gradual stabilising as the flows of opportunity improve. Competition remains high for well-located deliverable sites, whilst more complex or lower value locations see less competition. Investment is, I think, expected to remain selective in the near term as landowner pricing realism continues to act as a constraint in some areas. We remain confident of delivery over the next few years. We already own and have planning for all of our 2026 completions and already own or control everything we need for 2027, almost all of which has planning. With the momentum we've outlined, we are on track to open more outlets in 2026 than we did in 2025 and expect average outlets to increase year on year. So now I'm going to run through a couple of example sites approved during 2025. Both examples are own sites that we've unlocked and I think reflect the tangible benefit of our assertive planning actions. They demonstrate the improving planning environment and illustrate how our mature strategic plan pipeline is supporting early delivery during this period of planning opportunities. So you may recall that in October, Sean White highlighted this particular site located in the Greenbelt on the edge of Solio. We've held this land for over 30 years and I think few sites demonstrate the maturity and value within our strategic pipeline or indeed the frustrations of the planning system quite as well as this one. The journey hasn't been straightforward. Though it was considered as a draft allocation in the early 2010s, the site didn't make it into the 2013 adopted Solihull Local Plan, given limited greenbelt review. Though the site was not formally adopted, it was never dropped, but was identified as a draft allocation since the local plan review commenced in 2015. After various stages of consultation, the local plan journey concluded negatively in October 2024, when an inspector's report into the plan concluded that it would be found unsound if pursued. So after nearly 10 years of effort, the council withdrew their plan. But the breakthrough came when two things aligned, our continuing local engagement and the emergence of the draft MPPF 2024. This caused an immediate shift in sentiment within the council, a council which now found itself under real pressure to deliver a five-year housing land supply. In fact, as Sean noted in October, whilst we had already worked to prepare an application, we were now actively encouraged by the Planning Authority and we submitted an application in December 2024. This came against a positive backdrop, an updated MPPF guidance on Greenbelt release and strengthened recognition of local housing need. What followed was a marked change in pace. Engagement with officers and elected members was constructive throughout. and we secured a resolution to grant within 12 months. That is rapid progress in today's planning environment and a testament to the quality of the work from our team and the appetite of forward-thinking councils to approve high-quality schemes on a proactive basis to support their housing need. We now move to the next phase. Reserve matters applications are underway and will be submitted later this year, with an outlet anticipated at late 2027. This site, I think, is a story of the commitment and our commitment to strategic land over the long term, to partnership and being agile enough to act decisively when the environment shifts in our favour. And it represents exactly the kind of capital efficient progress we need. Land we have held for decades, unlocked through determination, good timing and the strength of our relationships. And now a smaller site example, this one at Abbots Langley, another owned site which was acquired in 1996 on greenbelt land, now considered greybelt. We submitted a detailed application in July 2025 proposing 50% affordable housing. What made this possible was the constructive early engagement with the local planning authority. They encouraged a detailed submission in this instance because the housing need was clear and the authority could not demonstrate a five-year housing land supply. And as a result, the presumption in favour applied, giving the application a strong footing from the outset. That clarity in national policy meant that our teams could move confidently and present a high-quality scheme with the right evidence behind it. The shift in sentiment, combined with the planning reforms, created an environment where good applications are now progressed quickly, and Addis Langley is a perfect example. We'll shortly begin work on site with an outlet scheduled to open in the second half of this year. So to summarise, the assertive planning strategy that we've pursued since 2023 is delivering results. The planning reforms have created a more decisive and supportive environment and where engagement is tougher, if updated then the MPPF gives our teams the certainty they need to pursue an appeal route if required. The examples this morning give me confidence that the planning landscape is continuing to improve and that it will be supportive of our medium-term targets. So we outlined these targets to you in October last year, and this is our business focus. We remain both committed and confident in achieving these over the medium term. During 2026, we will continue to focus on strategy execution and with improvements in results coming through over the medium term. And as a reminder, this plan is predicated on current market conditions, so sales rates around the levels we've seen over the last two years. So you've heard today that our strategy is in progress and is driving returns in what has been a challenging environment over the last few years. We are a business with a strong balance sheet, excellent land bank and experienced teams and we've ensured that we are ready and poised for growth. We are well positioned. Our planning strategy shows signs of early wins with continuing momentum and an improving planning backdrop. Day to day, we're focused on driving outlets, recycling capital, and driving returns without net land investment. Thank you, and happy now to move to questions.