BUSINESS LIVE: Chapel Down seeks AIM listing; OnTheMarket takeover row; Taylor Wimpey ups guidance

Oli Creasey, property equity analyst at Quilter Cheviot:

‘Taylor Wimpey released a Q3 trading statement this morning, which paints a picture of resilience in a challenging market.

“The guidance suggests that the company has been able to maintain profit margins at the same level as in H1 2022 (operating profit margin was 1.4%), which is some way below the 20.9% reported in 2022, but still healthy, particularly in the wider context of higher interest rates and their impact on the UK property market.

‘Today’s statement contained no direct information on house prices, but management has pointed to ‘optimised prices’ as a reason for the improved guidance. We estimate that this means similar prices to those achieved in H1 2023, which had actually increased +6.7% YoY, albeit partly driven by a change in mix.

‘Management also noted that cost discipline was a key factor in maintaining profitability, and note that the company has not been buying replacement land plots at the same rate as sales – in the past 12 months, the size of TW’s landbank has shrunk by c.9,000 plots (-4k in the short term landbank, -5k in strategic pipeline). However, with 82k plots still in the short term landbank alone (equivalent to eight years of volume at 2023 rates, or six years at 2022 rates), the company has less need to buy land compared to some peers.

‘Management has noted that the current market backdrop remains uncertain, but are confident in the medium to long term fundamentals of the UK residential property market.’

Taylor Wimpey has warned of ‘significant market uncertainty’, as affordability woes from high mortgage rates dent demand.

However, the homebuilder forecast annual operating profit at the top end of its previous outlook range.

The FTSE 100 builder, which had already forecast operating profits to halve this fiscal year, now expects full-year earnings, including joint ventures, at the top end of its outlook range of £440million to £470million.

This is ahead of market forecasts of £456million pounds.

An OnTheMarket investor has urged fellow shareholders to block US-based Co-Star Group’s planned takeover of the London-listed firm.

Writing to ‘shareholders, employees and all UK estate agents’, Brett Stone said the takeover ‘is not in the UK’s national interest’.

He also argues the deal undervalues the group and is ‘likely to result in significantly higher total portal costs for UK estate agents, more than 10,000 of which are small businesses’.

British wine maker Chapel Down is seeking a new listing on the AIM market as part of its ‘ambitious growth plan’, with the group hoping to boost its shares’ liquidity and encourage a wider pool of investors.

Boss Andrew Carter told investors:

‘We are pleased to announce Chapel Down’s plan to admit its shares to trading on AIM, a move which reflects the maturity of the business and the ambitious growth plan we are committed to delivering in the years ahead.

‘Chapel Down has greatly benefitted from its AQSE listing over the past 20 years as it has grown from a start-up in an embryonic industry into England’s leading and largest winemaker with a consistent track record of profitable growth.

‘We believe that a move to AIM will attract a wider pool of investors to participate in Chapel Down’s growth as the leading producer in the world’s newest global wine region and as we continue to pursue our well progressed and fully funded plan to double the size of the business in the five years to 2026.

‘Today’s confirmation of a record 2023 harvest, with tonnage 86% higher than 2022 and 75% higher than the previous record posted in 2018, is creating great excitement within our business, and will underpin our strategic ambition to double the size of the business by 2026 as we continue to build Chapel Down’s position as England’s number one and most celebrated winemaker.’

Oli Creasey, property equity analyst at Quilter Cheviot:

‘Taylor Wimpey released a Q3 trading statement this morning, which paints a picture of resilience in a challenging market.

“The guidance suggests that the company has been able to maintain profit margins at the same level as in H1 2022 (operating profit margin was 1.4%), which is some way below the 20.9% reported in 2022, but still healthy, particularly in the wider context of higher interest rates and their impact on the UK property market.

‘Today’s statement contained no direct information on house prices, but management has pointed to ‘optimised prices’ as a reason for the improved guidance. We estimate that this means similar prices to those achieved in H1 2023, which had actually increased +6.7% YoY, albeit partly driven by a change in mix.

‘Management also noted that cost discipline was a key factor in maintaining profitability, and note that the company has not been buying replacement land plots at the same rate as sales – in the past 12 months, the size of TW’s landbank has shrunk by c.9,000 plots (-4k in the short term landbank, -5k in strategic pipeline). However, with 82k plots still in the short term landbank alone (equivalent to eight years of volume at 2023 rates, or six years at 2022 rates), the company has less need to buy land compared to some peers.

‘Management has noted that the current market backdrop remains uncertain, but are confident in the medium to long term fundamentals of the UK residential property market.’

Taylor Wimpey has warned of ‘significant market uncertainty’, as affordability woes from high mortgage rates dent demand.

However, the homebuilder forecast annual operating profit at the top end of its previous outlook range.

The FTSE 100 builder, which had already forecast operating profits to halve this fiscal year, now expects full-year earnings, including joint ventures, at the top end of its outlook range of £440million to £470million.

This is ahead of market forecasts of £456million pounds.

An OnTheMarket investor has urged fellow shareholders to block US-based Co-Star Group’s planned takeover of the London-listed firm.

Writing to ‘shareholders, employees and all UK estate agents’, Brett Stone said the takeover ‘is not in the UK’s national interest’.

He also argues the deal undervalues the group and is ‘likely to result in significantly higher total portal costs for UK estate agents, more than 10,000 of which are small businesses’.

British wine maker Chapel Down is seeking a new listing on the AIM market as part of its ‘ambitious growth plan’, with the group hoping to boost its shares’ liquidity and encourage a wider pool of investors.

Boss Andrew Carter told investors:

‘We are pleased to announce Chapel Down’s plan to admit its shares to trading on AIM, a move which reflects the maturity of the business and the ambitious growth plan we are committed to delivering in the years ahead.

‘Chapel Down has greatly benefitted from its AQSE listing over the past 20 years as it has grown from a start-up in an embryonic industry into England’s leading and largest winemaker with a consistent track record of profitable growth.

‘We believe that a move to AIM will attract a wider pool of investors to participate in Chapel Down’s growth as the leading producer in the world’s newest global wine region and as we continue to pursue our well progressed and fully funded plan to double the size of the business in the five years to 2026.

‘Today’s confirmation of a record 2023 harvest, with tonnage 86% higher than 2022 and 75% higher than the previous record posted in 2018, is creating great excitement within our business, and will underpin our strategic ambition to double the size of the business by 2026 as we continue to build Chapel Down’s position as England’s number one and most celebrated winemaker.’