UK's Taylor Wimpey raises 2021 profit view as housing market recovers

(Reuters) - UK homebuilder Taylor Wimpey on Monday forecast full-year earnings towards the upper end of expectations and 2021 profit above current consensus as the housing market recovered quicker than expected from a coronavirus-induced shock.

Shares of the company jumped 13% to become the top gainer on the FTSE 100 blue-chip index by 0900 GMT, recouping some of the 37% fall year-to-date.

Taylor Wimpey said the mid-point of its 2020 operating profit consensus expectation is 270 million pounds. It said 2021 operating profit would be above the consensus range of 359-626 million pounds.

“The quick recovery of the housing market in the second half of this year, ahead of expectations, is evidence of the underlying strength of demand and the importance of low interest rates and stable mortgage lending,” the company said.

A surge in Britain’s housing market pushed up asking prices for homes in October by the most in more than four years, with buyers ready to pay a premium for larger properties after their lockdown experience this year, a survey showed last month.

Taylor Wimpey, which operates from 24 regional businesses across the UK, said its construction sites would remain open and customer appointments at sales centres and show homes would continue through the government’s latest stay-at-home orders.

“What is striking about the latest update is its confidence not just in this year – when the pent-up demand from lockdown and a stamp duty holiday have been obvious tailwinds – but also next year,” AJ Bell analyst Russ Mould said.

As at Nov. 1, Taylor Wimpey’s order book stood at 3 billion pounds versus 2.7 billion pounds a year earlier, consisting of 11,530 homes.

(The story corrects paragraph 3 to say 270 million pounds is company-compiled consensus, not its outlook; also removes reference to 242-292 million pounds in the paragraph).

Reporting by Shanima A in Bengaluru; Editing by Ramakrishnan M.