Annual Report and Accounts 2011

2011 has been a transformational year for Taylor Wimpey.

In 2011 the company has:

  • achieved the double-digit UK operating margin target in the second half of 2011, ahead of schedule;
  • communicated a strategy to optimise the UK residential development business both internally and externally;
  • completed the sale of the North American business;
  • successfully restructured the Board;
  • proposed a final dividend of 0.38 pence per share; and
  • continued to improve the strength of the balance sheet, including selective investment in new land and buying back £85.4 million of our 10.375% Senior Notes due 2015.

Kevin Beeston
Chairman

 

2011 performance

Despite the ongoing challenges in the wider economy, Taylor Wimpey has made strong progress across a number of areas and it is pleasing to see this reflected in our financial performance.

We have increased profit from continuing operations before tax and exceptional items to £89.9 million (2010 loss: £15.9 million). After pre-tax exceptional charges for the year of £11.3 million (2010: £138.9 million), the majority of which related to refinancing costs in both years, profit before tax from continuing operations for 2011 is £78.6 million (2010 loss: £154.8 million).

Sale of our North American business

We were in the process of evaluating proposals for the sale of our North American business at the time of last year’s Annual Report and announced an agreement to sell this business on 31 March 2011. Following receipt of your approval as shareholders and the satisfaction of a number of customary conditions, we completed the sale of the business on 13 July 2011.

This represents a very significant step towards our goal of becoming a UK-focused homebuilder as Pete Redfern explains in his Chief Executive’s Review. We now have a strengthened balance sheet and increased financial capacity to invest in the UK market and we are well positioned to deliver further margin improvement going forward.

Strategy and dividend

Following the sale of the North American business we have communicated our future strategy to stakeholders both internally and externally. Pete Redfern outlines this strategy in detail in his Chief Executive’s Review and a key element is taking a more active assessment of, and approach to managing, the market cycle. In the medium term, when opportunities in the land market are less attractive, we anticipate reducing the level of investment in our land portfolio and, therefore, generating significant cash flow from operations. At such points in the cycle, we intend to retain a proportion of these funds in order to maintain balance sheet strength and return the remainder to shareholders.

In the meantime, given the current outlook in the UK housing market, and the strength of the Group’s asset base, we are proposing a final dividend of 0.38 pence per share (2010: nil). This represents the final portion of a total dividend representing 1% of Net Asset Yield. Subject to shareholder approval at the AGM, the dividend will be paid on 22 May 2012 to shareholders on the register at the close of business on 20 April 2012.

This dividend will be paid as a conventional cash dividend, but shareholders are once again being offered the opportunity to reinvest some or all of their dividend under a re-launched Dividend Re-Investment Plan, details of which can be found in the Notes to the Notice of Meeting (PDF 76 KB).

Kevin Beeston signature

Kevin Beeston
Chairman