Shares of British homebuilder Taylor Wimpey (LSE:TW.) dropped over 6% on Wednesday following a revision to its annual operating profit forecast, which was reduced by £20 million due to unexpected expenses linked to remediation work at a historic site.
The company now anticipates operating profits of £424 million for 2025, down from earlier market expectations of £444 million, after reporting an adjusted operating profit of £161 million for the first half of the year.
Despite the revised profit projection, Taylor Wimpey upheld its UK housing delivery forecast, expecting between 10,400 and 10,800 units excluding joint ventures, and reaffirmed its average selling price target of £340,000.
During the first six months, the company delivered 5,264 homes, accounting for 46% of the midpoint of its full-year target.
The average selling price in the UK declined 1.3% to £313,000, falling short of the prior estimate of £330,000. Taylor Wimpey attributed this decrease to delayed London deliveries pushed into the second half and a greater share of affordable housing in the mix.
Sales velocity has softened recently, with weekly sales per site dropping to 0.59 units for the four weeks ending July 27, marking a 7.8% decline compared to last year. This contrasts with a 4% rise year-on-year to 0.77 units per week seen in the January-April period.
As of July 27, the company’s order backlog rose 4.2% in value but contracted 2.8% in volume relative to the same timeframe last year. This reflects a deceleration from April, when backlog growth stood at 11.5% in value and 5.3% in volume.
Taylor Wimpey reported net cash reserves of £326 million in the first half and expects this to reach £350 million by year-end 2025. The firm approved land acquisitions totaling about 3,000 lots during this period and declared an interim dividend aligned with its dividend policy.
Additionally, the company boosted its fire safety provision by £222.2 million but clarified that cash outflows related to remediation efforts in 2025 would remain unchanged.
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