Taylor Wimpey (LSE:TW.) reported first-half revenue of £1.683 billion, up from £1.654 billion a year earlier, but adjusted operating profit fell to £129.7 million from £161.0 million as margins thinned to 7.7% from 9.7%.
The UK-focused homebuilder, which also operates in Spain, completed 4,723 UK homes excluding joint ventures in the six months to 28 June, down from 4,894 in the same period last year, as affordability pressures and softer customer conversion weighed on sales.
Citing a downturn that has proved more prolonged than expected, the board revised its distribution policy to 4% of net assets annually, down from the prior level, and declared an interim dividend of 1.20p per share, worth around £42 million, alongside a further £42 million share buyback.
"We are managing the business tightly, controlling costs and building resilience for an improved housing market when it comes", said chief executive Jennie Daly.
Net cash stood at £168.6 million at period end, down from £326.6 million a year earlier, after returning £104.1 million via dividends and £52.3 million via buybacks in the half.
Taylor Wimpey now expects full-year UK completions of between 10,600 and 10,800 homes, within the lower half of its March guidance range, with underlying pricing running around 2% below prior-year levels and build cost inflation of 3-4%.
Year-end net cash is expected to be around £250 million, after approximately £100 million of cladding-related outflows.
News Intelligence what this means for the company
Taylor Wimpey's first-half results reveal a sharper downturn than the board anticipated: adjusted operating profit fell 19% to £129.7m despite flat revenue, margins compressed 200 basis points to 7.7%, and UK home completions declined 3.5% year-on-year. In response, the board cut its distribution policy from an unspecified prior level to 4% of net assets annually, signaling reduced confidence in near-term recovery.
The combination of margin compression, lower completion guidance (10,600–10,800 homes, in the lower half of March's range), and a 48% cash burn in six months—from £326.6m to £168.6m—alongside a halved distribution policy, suggests the board expects the housing market downturn to persist longer than previously modeled. Affordability pressures and weak customer conversion remain structural headwinds.
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