Taylor Wimpey has set aside £125m to rectify cladding and other fire safety improvement works to apartment buildings constructed by the company in the last 20 years, including those below 18 metres in height, as it revealed that the pandemic saw pre-tax profits for 2020 fall by 68.4% to £264.4m.
The news was revealed in the company’s full-year results for the year ended 31 December 2020 which, although showing falling revenue, profits and margins during a challenging year, also saw the company bounce back in the second half of the year to achieve a record end-of-year future order book worth £2.68bn (compared to £2.17bn the previous year).
Revenue in 2020 was 2.79bn (35.7% less than £4.34bn in 2019); operating profit was £300.3m (64.7% less than £850.5m in 2019); operating profit margin was 10.8% (compared to 19.6% in 2019); pre-tax profit was £264.4m (68.4% less than £835.9m in 2019), with final profit for the year at £217.0m (67.8% less than £673.9m in 2019).
However, net cash leapt by 31.8% to £719.4m, compared to £545.7m in 2019, and the company aims to resume dividend payments to shareholders starting with a proposed 2020 final dividend of c.£151m (4.14 pence per share), subject to shareholder approval.
The company says its 2020 results were in line with expectations, with good recovery in the second half of the year as build capacity returned to near normal levels.
Pete Redfern, Taylor Wimpey chief executive, said: “2020 was a very challenging year, during which our priority has continued to be the health and safety of our colleagues, customers, suppliers and subcontractors. Operating performance has bounced back strongly in the second half of 2020, with build capacity returning to near normal levels and strong sales.
“We are confident in the medium term performance of the housing market and therefore accelerated our land purchases from May 2020 as high-quality land became available at attractive rates. We are now focusing on driving efficiencies across the business, the roll out of our new house type range and implementing our ambitious new environmental strategy.
“The UK housing market has been resilient and continues to reinforce our confidence in our outlook. We are a cash generative business with a strong balance sheet, and we are pleased to announce today that we will reinstate our ordinary dividend in line with our aim of providing a reliable income stream to our shareholders.
“As part of today’s results, we are also announcing help for building owners, with £125m in funding to support fire safety improvement works to bring Taylor Wimpey apartment buildings constructed in the last 20 years up to the recently updated current RICS EWS1 guidance. We have taken this decision in order to provide certainty for customers and leaseholders and to avoid them bearing the cost of investment to ensure their buildings are safe.”