The FTSE 100 housebuilder was brimming with confidence as it pointed to an increase in the average selling price of its houses, higher completion of homes and a growing book order.
The group completed 6,580 homes over the six months to 2 July 2017, excluding joint ventures, 9.3% more than the year before.
And it benefited from a 6.3% rise in the total average selling price to £253,000.
The group also proclaimed it would be rewarding shareholders with a special dividend in July 2018 to the tune of £340m.
“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,” chief executive Pete Redfern said.
Taylor Wimpey’s shares shot up to 196p on Tuesday morning, achieving a two-month high.
The builder’s update did include a few misses, however.
Profit before tax came in at £205m versus £268.8m in 2016. Similarly, earnings for the period, after factoring in exceptional items, were 23% lower at £165.7m.
Even so, Liontrust macro process co-manager Jamie Clark, who holds 3% in Taylor Wimpey in his Liontrust Macro Equity income fund, was generally positive on the “exciting statement” from the British builder.
While the group did flag its £130m provision to compensate buyers who were trapped in ground rent contracts attached to some of its new-build properties, Clark was pleased that the dividend exceeded estimates, reflecting a “reinvigorated housing market”.
Hargreaves Lansdown senior analyst Laith Khalaf cautioned that there are still warning signs for the sector that could hurt Taylor Wimpey further down the line.
“Building costs are increasing, and with house price growth slowing, that could start to rein back margins,” he noted.
“Likewise, the economic environment is weak, which could take a toll on consumer confidence and the property market. However, these concerns add up to tailwinds abating, rather than disappearing altogether.”
More importantly, “one does have to wonder what happens when the merry-go-round of cheap money comes to an end, and how the housebuilders will fare if Help to Buy is withdrawn and interest rates rise significantly,” he added.
