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Taylor Wimpey plans £20m cost cutting drive

The news came in a trading update this morning which also highlighted improved operating margins last year.

The firm said: “As market conditions changed at pace in the third quarter we acted quickly and decisively implementing even tighter cost scrutiny, significantly reducing land commitments, and closely controlling the release of investment in work in progress.  

“As we focus on maximising the efficiency of all our operations, we have begun a consultation on a series of proposed changes which, if they go ahead, would be expected to generate annualised savings of around £2om, and the costs to achieve these would be c.£8m.

“This incorporates proposed changes identified as part of our ongoing drive to increase operational efficiency and others that, if implemented, would reduce overheads to reflect market conditions.

“The proposed changes would neither affect our existing market coverage or ability to deliver volumes from our landbank, nor our ability to deliver high quality product and service to our customers.”

Taylor Wimpey added: “Although we have strengthened our outlet position during 2022 as planned, the ongoing market uncertainty means that sales remain significantly below levels seen prior to the rise in mortgage rates in Q3 2022. 

“Accordingly, we enter 2023 with a lower private order book than in recent years and we expect overall volumes to reduce in 2023. We continue to focus on sales and supporting customers through their purchasing decisions.

“Pricing in the land market is yet to reflect the changing market environment and with a strong land position and high quality outlets, we will continue to operate on a highly selective basis.”

Jennie Daly, CEO, said: “The business performed well in 2022, as our tight operational controls and price discipline led to an improved operating margin. Despite the economic and political backdrop through the second half, I am pleased that we expect to report full year operating profit in line with expectations.

“As previously reported, we have acted quickly and decisively to address changing market conditions and continue our efforts to maximise efficiency.”