Taylor Wimpey's first-half profits dropped 24 per cent due to a £130m provision the housebuilder set aside to compensate customers affected by a leasehold scandal, it was revealed today.
In April, the FTSE-100 listed firm apologised to customers over leasehold contracts in which ground rents – which are paid to owners of the property – doubled every 10 years.
Earnings for the period to 2 July dropped to £165.7m from £215m in the same period last year.
The group also revealed that it built 9.3 per cent more homes than a year earlier, bringing the total to 6,580. Taylor Wimpey's average selling price, excluding joint ventures, rose to £253,000 during the period while its order book was two per cent less than a year earlier at £2.1bn.
At the time of writing, Taylor Wimpey's shares were up 1.68 per cent at 193.6p.
What Taylor Wimpey said
Pete Redfern, chief executive, said:
Trading through the first half of 2017 has been very positive, supported by favourable UK housing market fundamentals and good customer confidence. In the central London market in particular, we are pleased to see improved customer confidence following a period of uncertainty.
Although the wider political backdrop could have an impact on confidence levels and market dynamics, we have seen no material change in trading since the General Election, and our first-half performance has been strong. Our business is built to maximise performance in all market conditions, benefiting from a robust balance sheet and high-quality landbank. With a strong forward order book and a disciplined strategy to manage the business through the cycle, we remain on track to meet both our full-year objectives and medium-term strategic goals.