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Taylor Wimpey to bump up dividend payout, sets out five-year goals
Housebuilder Taylor Wimpey was on the rise on Tuesday after announcing plans to bump up its dividend payout as it set out its new goals for the next five years.
The company said it plans to increase the dividend payment to around 7.5% of group net assets, up from 5% and equating to at least £250m per year, up from £150m. In addition, it announced a 2019 special dividend of £350m, taking total dividends for the year to around £600m, up 20% on the year.
Based on its current five-year expectations and in current market conditions, Taylor Wimpey expects special dividend payments to remain comparable to the 2018 and 2019 payments.
At an event for analysts and institutional investors in Hampshire later in the day, the company will set out its goals for the next five years. These include an increase of return on net operating assets to 35% and maintaining operating profit margins at around 21% to 22%.
The group is also aiming for operating cash conversion of between 70% and 100% of operating profit into operating cash flow and increased landbank efficiency, cutting the length of short-term owned and controlled landbank years by around one year to 4-4.5 years.
Chief executive Pete Redfern said: "The changes we are announcing today to our operations will develop and be implemented over time, but are very significant - we aim to deliver increased growth, higher dividends and an increase in our return on capital by working our existing land assets harder and smarter.
"We have always said that running the business in the right way for the long term was more important than short term financial performance. We continue to believe this and the changes to the way we see our customers and the way we see the business long term are much more fundamental: putting our customers' needs and desires at the heart of our business, which will ultimately make us a more valuable, sustainable business for all of our stakeholders."
At 0855 BST, the shares were up 2.6% to 200.20p.