Taylor Wimpey

28 February 2018 Full year results for the year ended 31 December 2017

despite some wider macroeconomic uncertainty, consumer confidence remains robust and market fundamentals are solid. We grew volumes to nearly 15,000 homes during the year and are focused on delivering much-needed homes across the UK to the highest quality and standard.

  • £450.5 million total dividends paid in 2017 (2016: £355.9 million), with c.£500 million (c. 15.3 pence per share) declared for 2018 (subject to shareholder approval)
  • Record return on net operating assets** of 32.4% (2016: 30.7%)
  • Further growth in operating profit* margin to 21.2% (2016: 20.8%)
  • Completed a total of 14,842 homes, including Spain and joint ventures, up 4.6% (2016:
    14,185)
  • 3.5% increase in UK total average selling price to £264k (2016: £255k), excluding joint
    ventures
  • Significant improvement in customer satisfaction metrics, with average scores in the last
    six months of over 90%
  • Reduction in Annual Injury Incidence Rate per 100,000 employees and contractors to
    152 (2016: 211)

to see a significant improvement in customer satisfaction, averaging a score of over 90% in the last six months.

In 2017, total UK home completions (including joint ventures) increased by 4.8% to 14,541(2016: 13,881). During 2017, we delivered 2,809 affordable homes, including joint ventures,(2016: 2,690), equating to 19.3% of total completions (2016: 19.4%). Our net private reservation rate for the year was 0.77 homes per outlet per week (2016: 0.72). Private cancellation rates for the year remained low at 13% (2016: 13%).

First time buyers accounted for 41% of total sales in 2017 (2016: 38%). Investor sales continued to be at a very low level of c.3% (2016: 3%). During 2017, approximately 43% of total sales used the Help to Buy scheme ; During the year 27% of sales in the London market used Help to Buy London, which launched in February 2016.

?? As we have previously announced, we have made good progress in securing agreements with freeholders representing over 90% of historic leases with a ten-year doubling ground rent clause, to enable our customers to convert to an RPI-based structure, should they elect to participate in the assistance scheme we announced in April 2017. We continue to work with the remaining freeholders to address the small number of remaining leases. A provision of £130 million, before tax, was recorded as an exceptional item in the H1 2017 accounts as a result of the leasehold review, and remains unchanged in the full year 2017 accounts. ??

Our short term landbank stands at c.75k plots, equating to c.5.1 years of supply at current completion levels as at 31 December 2017. During 2017 we acquired 8,040 plots (2016: 6,355 plots) at anticipated contribution margins of c.28% and return on capital employed***of c.34%.

The average cost of land as a proportion of average selling price within the short term owned landbank remains low at 14.8% (2016: 15.4%). ?The average selling price in the short term owned landbank in 2017 increased by 8.1% to £280k (2016: £259k).?

We have one of the largest strategic pipelines in the sector which stood at a record of c.117k potential plots as at 31 December 2017 (31 December 2016: c.108k potential plots). During 2017, we converted a further 7,863 plots from the strategic pipeline to the short term landbank (2016: 9,519 plots). We continue to seek new opportunities and added a net 17.1k new potential plots to the strategic pipeline in 2017 (2016: 10.8k). In the year, a record 53% of our completions were sourced from the strategic pipeline (2016: 51%).

During 2017, underlying build cost per unit increased to £143.7k (2016: £137.2k), reflecting underlying build cost inflation as well as some mix impact of product delivery in the year. In the period, there were increases in underlying build cost (excluding house type mix impact) of c.3.5% year on year (2016: c.4%), largely due to continued pressure on resources to deliver the higher level of homebuilding.

We make a significant contribution to the local communities in which we operate. In 2017, we contributed £413 million???[maybe K] to local communities in which we build across the UK via planning obligations, providing, for example, local infrastructure, affordable homes, public transport and education facilities (2016: £363 million). In total, during 2017 we donated and fundraised over £1 million for registered charities (2016: over £875k), in addition to c.£90k for other organisations, such as scout groups and various local community causes (2016: c.£159k).

The Spanish housing market remained positive throughout 2017. We completed 301 homes in 2017 (2016: 304) at an average selling price of €352k (2016: €358k). The total order book as at 31 December 2017 was 329 homes (31 December 2016: 293 homes). The Spanish business delivered a significantly improved operating profit* of £26.8 million for 2017 (2016: £20.6 million) and an operating profit* margin of 28.5% (2016: 22.0%)

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h1 2016

EPS: 6.6; 5.8 h1 2015; 15.1 FY2015

too early to assess the impact of the EU Referendum

Total Liability 2.33B; Equity: 2.59B

AR 2015

File: Taylor Wimpey ARA 2015.pdf

8.0% increase in total average selling  price to £230k
Return on net operating assets** (%) 27.1
We operate in a cyclical market. This can be very easy to forget when the market is positive.

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Fr 2011, our earnings per share have increased by 610%

regular maintenance dividend, which is currently set at 2% of net assets

Pete Redfern Chief Executive

Diluted earnings per share  14.9p  11.5p

Bank and other loans   (100m)

Five Year Review

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