Taylor Wimpey bucked the industry trend as it said its second half had been positive and mooted further growth in its full year.
The housebuilder said its order book stood at £2.2bn, down slightly from last year's £2.3bn, with 8,751 homes sold in the year to date, compared with 8,981 at the same point last year.
Taylor Wimpey is operating across 290 outlets, down from 291 at the same time last year. Sales have risen to 0.81 per outlet per week in the year to date, up from 0.75 during the same period the year before, while sales rates in the second half edged up to 0.71, compared with 0.70 the year before.
But the company said its margin is expected to increase on the 20.8 per cent it delivered last year, a 30 per cent return on net operating assets. It said it expected net cash to hit £500m by the end of this year, up from £365m at the end of last year.
Shares were up 0.9 per cent at 194.7p in mid-morning trading.
Why it's interesting
After housebuilders were hit last week by a pessimistic outlook from Persimmon, Taylor Wimpey's trading update was more encouraging. The company said it expected to deliver further growth and performance improvement in 2018, despite a slight slowdown in sales in the second half.
The company added it had set aside £130m to cover leasehold customers hit by rising ground rents, adding it had reached agreements with freeholders to allow the "substantial majority" of customers with a 10-year doubling lease to convert ground rent terms to an RPI based structure.
But it also warned the cost of building is expected to increase between three and four per cent this year, with most pressure coming from labour costs.
However, analysts were satisfied.
"Taylor Wimpey's trading statement is seasoned with several 's' words: strong, stable, sustainable," said Anthony Codling, equities analyst at Jefferies.
"Share prices in the sector have been shaky since the silverback selling in September. In our view, it is time for the smart money to stock up on shares in the sector."
What Taylor Wimpey said
Chief executive Pete Redfern said:
Taylor Wimpey has performed strongly during the second half of 2017, delivering excellent sales rates and making further good progress against our operational targets. While we are alert to potential political and economic risks, demand for new housing remains high across the UK and market conditions are favourable. Notwithstanding the recent small increase in the base rate, we have continued to see stability in trading patterns.
Looking ahead, we are on track to meet our full year expectations and deliver further growth and performance improvement in 2018. With a strong balance sheet in place and a high-quality landbank, our business is very well positioned to deliver sustainable growth.