Taylor Wimpey strips out a group management tier

Aaron Morby 3 years ago
Share

House builder Taylor Wimpey has launched a £10m cost-cutting plan in a bid to return the business to 22% operating margins.

Redfern streamlines operation, speeds up building and snaps up cheap land in bid to return to 22% operating margins
Redfern streamlines operation, speeds up building and snaps up cheap land in bid to return to 22% operating margins

The firm is removing one tier of operational management throughout the group and rationalising its London operating structure to focus on affordable price points that meet the affordability needs of Londoners.

It is also in consultation on a series of reductions in central and business unit overheads. This will bring £15m in annual operational savings from 2021.

Taylor Wimpey is also on a land buying spree following June’s £500m fundraising, agreeing on terms on 70 sites totalling 14,500 plots worth £826m.

Pete Redfern, chief executive, said: “Operating through the challenges of the last six months has also highlighted opportunities for ongoing efficiency and performance improvement, as our recent investments in systems and processes have performed well.

He said the business was now expecting to exceed previous profits forecasts for the year with next year’s completions set to return to last year’s level.

In a start of second-half trading statement this morning, Redfern said: “All sites continue to operate within Covid-secure guidelines, and through the second half, we have focused on removing bottlenecks to increase construction pace without compromising on safety or quality.

“At present, the majority of our sites are operating at or near normal construction pace and we do not expect this to be adversely affected by the new restrictions.”

He added: “With our sites operating at or near to normal capacity and with a strong order book and resilient customer demand we now expect 2021 completions to be between 85-90% of 2019 levels.”

Taylor Wimpey’s order book is up 11% at £3bn compared to last year. This equates to 11,530 homes (2019: 10,486).

The group has also been snapping up land at attractive returns in line with its medium-term operating margin target of 21-22% and with an average return on capital employed of 34%.

This includes an increased number of smaller sites compared with recent years to get a better balance of both large and small sites.

Redfern said: “Looking ahead, we are on track to deliver full-year 2020 results towards the upper end of market expectations and with strong operational momentum and positive forward indicators, our confidence in 2021 has increased.

“As a result, assuming the market remains broadly stable, we expect to deliver 2021 operating profit materially above the top end of the current consensus range.”

Latest news

Precast firm FP McCann cleared after immigration raid

Home Office takes no action after public raid on construction site
5 hours ago

Wates-owned SES restructure delivers record profit and revenue

Building services contractor revenue soars to almost £300m
4 hours ago

25 groundworks firms win £100m Places for People deal

M&J Evans, Carmac and Churngold Construction feature in housing association's line-up
5 hours ago

Energy efficiency firms angry at lack of CITB support

SME contractors funding bid "does not meet the current criteria for supporting productivity or EDI"
5 hours ago

£400m South Cambridge science park approved

Outline approval allows former sewage treatment works to be demolished
5 hours ago

McLaren gets green light for 45-storey Leeds tower

Landmark Wellington Square scheme will see 464 flats built with 360,000 sq ft of offices
3 days ago

Heavy rain causes 1.9% construction output fall

Hopes remain undampened of a resi-led recovery this summer
3 days ago

Taziker restruture to return to profitability after £1.2m loss

Founders bought the business back from private equity after last year's loss
3 days ago

£220m London wharf homes scheme approved

285 homes to be built beside protected Albert and Swedish Wharves in Wandsworth
3 days ago

Major project veteran named civils director for Sizewell C

David Speight previously worked on Hinkley, Heathrow and HS2 client teams
3 days ago

Morgan Sindall lands £19m Milton Keynes hospital job

Crane lifts to be carefully co-ordinated to ensure air ambulance remains active
4 days ago

Clancy bolsters civils leadership team

Daniel Tonkin and Simon Hyams join as operation directors of water and infrastructure
4 days ago

Balfour names new project boss for HS2’s super-hub station

Steve O’Sullivan replaces Nigel Russell who was promoted to CEO of Balfour's HS2 ops
4 days ago

Buckingham Group supply chain hit doubles to £256m

Total owed to unsecured creditors soars as surety providers finalise claims
4 days ago

Builders demand an end to police plant bans

Call to suspend all embargoes on moving mobile cranes and large site kit
4 days ago

Green light for £65m Blackpool multiversity campus

Education campus of 350,000 sq ft will be delivered in phases
4 days ago

Vinci signs £138m Sheffield steel forge expansion deal

Sheffield Forgemasters signs landmark contract after two years of pre-construction works
5 days ago

McAlpine hires HS2 programme boss to head defence arm

Armed forces logistics expert Mike Hickson takes role as MD of defence
5 days ago

£200m carbon capture plan for Deeside site

Energy from waste operator enfinium looking to invest in North Wales plant
4 days ago

McAleer & Rushe promotes five staff to contracts directors

Design and build contractor targets £500m revenue next year
5 days ago

Consultant quartet win Government estate upgrade deal

Government Property Agency selects Arcadis, Tetra Tech, AtkinsRéalis and McBains
5 days ago

Resi towers pioneer to transform Liverpool site

Beetham founder Hugh Frost to help develop 1,200 new homes
6 days ago

Construction Manager of the Year crowned

Galliford Try's Barry Kingscote wins coveted prize: Full list of winners
5 days ago

Landsec £250m London terraced office job approved

Skanska tipped for 20-storey Hill House scheme near Fleet Street
6 days ago

Lendlease tops March contracts league

BAM and ISG rank third with big contract wins
5 days ago

Vistry strikes deal with Homes England for 1,000 units

Firm's timber frames factory will supply most of the Midlands houses
5 days ago

Morgan Sindall go-ahead to build 23-storey Salford resi job

Funding deal with CBRE allows latest project on bank of River Irwell to proceed
6 days ago

Unite Students gains planning for London and Bristol schemes

RG Group will build landmark Stratford tower and Freestone Island projects
6 days ago

Rolls-Royce gets go-ahead for 1.1m sq ft expansion in Derby

Major expansion of Raynesway campus planned to met submarine fleet orders
6 days ago

GMI Construction edges back into profit

A year of controlled consolidation helped generate £0.9m profit but cash at bank dropped to £10m
6 days ago

Contractor services