Housebuilder Taylor WImpey (LON:TW.) lowered its outlook for completions for FY26 and slashed its interim dividend. The firm said market conditions would remain ‘challenging’ with pricing below last year due to lower demand.
Taylor Wimpey cuts outlook and dividend
Presenting its H1 results, CEO Jennie Daly said the firm had delivered a ‘solid performance’ despite continuing market uncertainty. The firm’s focus for now is on managing the business tightly and controlling costs while it waits for an improvement in demand.
For the six months to June, the company posted a 1.7% increase in revenue to £1.68 billion. UK completions excluding JVs were down 4.5% to 4,723 units but average selling prices were 6.7% higher at £344,000.
For FY26, the developer now sees completions excluding JVs reaching 10,600 to 10,800, at the low end of its previous guidance. Average selling prices are only expected to be 1% higher than FY25, while build cost inflation is seen around 3% to 4%.
H1 adjusted operating profit fell 19% to £130 million after £240 million of provisions, mostly for cladding fire safety. Profit before tax was £117 million against a loss of £92 million last year, while adjusted earnings dipped 19% to 2.5p per share.
Despite a reduction in work in progress, net cash almost halved from £327 million to £169 million. Therefore, the firm slashed its interim dividend to 1.2p per share against 4.67p perviously. At the same time it said it would buy back up to £42 million worth of shares by the year end.
Rightmove also cuts outlook
Leading housing portal Rightmove (LON:RMV) also cut its FY26 outlook on weakness in the housing market, specifically new builds. The firm said it now expects revenue to grow by 6% to 8% instead of 8% to 10%.
Core membership is seen in a range of -1% to +1% for the year, based on new homes dropping 6% to 10% and estate agencies growing 1% to 2%. ARPA (average revenue per advertiser) is expected to grow by around £110 this year across both cohorts.
Regarding the potential class action initiated in November 2025, the certification hearing is scheduled for this November. The outcome of the hearing will determine whether the claim goes ahead and on what basis.
The claimants are asking for damages of up to £1.56 billion, while Rightmove insists the proposed claim is without merit. In H1 it provisioned £2.3 million out of an expected £4 million to £7 million potential cost.
We’ve said it before and no doubt we’ll say it again, but it’s too early to call the turn in the housebuilders. We know full well the market is a discounting mechanism and looks forward, but right now no-one has any visibility.
Taylor Wimpey is one of the country’s leading developers, and it has no idea when the market will turn up. Rightmove is far and away the UK’s most popular property portal, and it doesn’t have a clue either.
Also, the fact that both of them are having to provision for past conduct doesn’t exactly fill us with joy. In the case of Rightmove, it looks woefully underprovisioned if the tribunal decides in November the claim has merit and can proceed.
For the time being we would continue to give the residential market a wide berth. We still like infrastructure stocks, although their success means many are no longer the bargains they were.
