Taylor Wimpey PLC (LON:TW)'s trading update on 11 January emphasised the great strengths management has achieved in recent years and some of its fears: the land bank, the net cash, forward sales and the highly robust balance sheet, along with great operational capability, are all driving high margins and ROCE, but the near-death experience of 2007-10 taught the company that house building is cyclical so the structure is built around ensuring it can deliver earnings and manage the balance sheet across the cycle.
Confirms on track for earnings and dividends
The main content of the update is that earnings in the short term and foreseeable future are in line with expectations. The main part of the statement covered 2016, but the pointers to 2017, order book, land bank and cash indicate business will meet top-end expectations and return £1.3bn to shareholders by 2018.
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