An Analysis of the Financial Performance of Housing Industry in the United Kingdom - Case Study Example

AN ANALYSIS OF THE FINANCIAL PERFORMANCE OF HOUSING INDUSTRY IN UNITED KINGDOM By Foundation Department Introduction In the recent past, real estate industry in the United Kingdom has become a goldsite that is attracting many investors in the sector. Investors are buying huge massive lands and develop them for either residential houses or commercial houses. According to Torto (2002:38-40), the market for the houses have increased to an extent that selling and buying of the houses are a normal business operation. People are adding value to their money by exchanging money with houses (the market has turned volatile). Several factors that have contributed to this environment includes: Factors affecting the housing industry in the United Kingdom. 1. Positive factors Increase in house prices- for the last two decades, person’s income has been increasing gradually and as a result increasing investors buying power. This has resulted in high demand for houses which has led to increase in house prices in the United Kingdom. According to the data, the ratio of house price to income ratio has increased gradually since year 1995 (Farlow, 2004b:7). Low interest rates- most people in United Kingdom buy houses under mortgage scheme and they repay the loan with interest as they stay in the acquired house. According to the history an instance occurred that in year 1990s the mortgage loan interest was 15%, which negatively affected the demand of houses since people would not agree to take the loan which will cost them. In the recent past, mortgage loan has been cut to revolve around 5%, which encourage individuals to take the mortgage and acquire the houses. This has greatly promoted the housing sector to an effect that people still buy the houses, though their prices are highly inflated. Population increase- in the recent past, there have been an increase in social problem which has led to many break up and as a result many people demanding for houses. Many people immigrating from Eastern Europe to United Kingdom has also led to many people demanding for the houses. The average increase in life expectancy also leaves the country with many people who are searching for a shelter (Meen, and Meen, 2003:920). Expensive rents- rent of houses has raised proportionately to the price of acquiring a house. This does not live individual with an option to rent a house and therefore preference to acquire a house is still high. Inheritance- many people have the wealth left to them by their forefathers and as a result, they get the surplus to acquire housing. Future expectation of price increase- many people are buying houses expensively expecting that in the future the price of the house will increase further and they sell the house to make a profit. Ease of acquiring a mortgage- in united kingdom, mortgage are given as per individual earnings. Individuals can be given three times the income they are earning as a mortgage loan. Depreciated houses- most ancient houses have become a threat to life of people living on them and as a result they dispose them and acquire better houses. Increase in cost of building a single house- building many houses together encourages the economy of scale, which means that cost of production is greatly reduced. Building one houses become so expensive and as a result, people go for ready-made houses. 2. Negative factors Decreased employment to people in one time or another- this has led to decreased in purchasing power and as a result, people fail to acquire houses. Economic difficulties like the credit crunch in the year 2009, which led the state to control rates of money in the economy. This affects people borrowing demand due to increased interest rate and as a result decreased demand in houses. House location- most of strategic position for both residential and business houses are used up and the plan being developed in hard terrain is being forced to be strategic. Increased taxes and national contribution- high income taxes being charged and other compulsory contribution like insurance reduces money in disposal for people to invest in buying houses. The trend of house price is increasing at a rate of 8.5% as given by nationwide. If the trend continues, many investors will join the market and as a result supply of the house will be high which will lead on decline of house prices in the future (Amidu and Aluko, 2007:85). Analysis and interpretation of Taylor Wimpey plc and persimmon plc financial statements These two companies are British building companies. Their different characteristics, focusing on their financial performance are described below. TAYLOR WIMPEY PLC AND PERSIMMON PLC FINANCIAL STATEMENTS. a. Taylor Wimpey plc general performance Taylor Wimpey plc is one of is among the largest housing building company in the United Kingdom. The company formerly known as Woodrow plc is a limited company listed in London stock exchange and it is a member of the FTSE 100 Index. The company main headquarter is in London, but it also has its operational headquarter at High Wycombe. The company was formed as a result of the merger of two great housing rival Taylor Woodrow and George Wimpey in the year 2007and that is the origin of its name (Adams, and Watkins 2008:124). After the merger, the company there occurred a post-merger in the year 2008 where the United Kingdom construction operations of Taylor Woodrow were bought by Vinci and in year 2009, the unfinished construction of Taylor Woodrow in Ghana was sold out. After great reconstruction of Taylor Wimpey plc, the company has been able to measure on its product and its performance have been it rise to be even being the best in year 2015 making 300million deal (The Independent 2015:2). Company general performance for the last five years of its operations Details 2014 2013 2012 2011 2010 Unit sales 12,454 11,696 9,903 9,360 9,384 Revenue £2,686.1m £2,295.5m £2,019.0m £1,808.0m £1,767.7m Average selling price** £213,000 £191,000 £175,640 £166,142 £169,339 Profit from operations* £480.7m £312.9m £226.1m £153.6m £130.8m Profit before tax* £450.1m £268.4m £181.8m £144.0m £91.5m Basic earnings per share* 11.50p 7.30p 7.00p 1.70p 5.30p Diluted earnings per share* 11.20p 6.70p 4.60p 2.10p -1.50p Net asset per share 77.9p 69.6p 61.5p 57.3p 56.9p Total shareholders’ equity £2,535.3m £2,251.8m £1,989.50 £1,835.00 £1,823.10 Return on capital employed 20.6% 14.6% 11.3% 8.3% 4.9% Accessed April 20, 2015 from https://www.taylorwimpey.co.uk/corporate/investor-relations/reporting-centre/2015 1. ** The average selling price has been calculated before they have been adjusted to fair value as required by IAS18. 2. All figure has include the good will and other exceptional items. * The marked figure have been restated to rhyme with IAS19 employees revised benefits At a glance, the company can be said to be improving a year after another. As per the data, the data, the sales and revenue increased gradually as from year 2010 all through to the year 2014. b. Persimmon plc general performance This is a house building company in the United Kingdom. The company headquarter is in New York City. The company is listed in London stock exchange since year a985 and formerly a constituent of the FTSE 100 Index. The company is headed by Nicholas Wrigley as the Chairman and Jeff Fairburn as chief executive officer. The founder of the company was Duncan Davidson in the year1972.The initial target of the company was to build 1000homes a year, but this has increased to 13,509 in year 2014 due to increased demand of houses in the United Kingdom. The company has found itself off-guard in the quality of houses it with recent according to (BBC news 2015) being a case of substandard wiring that killed a child. In year 2013, the company sold a house with a garage that could not fit a car due to its narrow door (Daily mail online). The company general performance for the last five years is as given by the data in the table below. Details 2014 2013 2012 2011 2010 Unit sales 13,509 11,528 9,903 9,360 9,384 Revenue £2,573.9m £2,085.9m £1,721.4m £1,535.0m £1,569.5m Average selling price** £190,667 £181,861 £175,640 £166,142 £169,339 Profit from operations* £473.3m £333.1m £222.5m £153.6m £130.8m Profit before tax* £475.0m £329.6m £221.5m £144.0m £91.5m Basic earnings per share* 124.5p 83.3p 56.7p 35.7p 23.8p Diluted earnings per share* 124.3p 82.8p 56.2p 35.5p 23.7p Cash return or dividend per share 95.0p 70.0p 75.0p 10.0p 7.5p Net asset per share 715.4p 671.4p 658.2p 608.6p 579.1p Total shareholders’ equity £2,192.6m £2,045.5m £1,993.7m £1,839.3m £1,744.0m Return on capital employed 24.6% 17.6% 12.2% 8.3% 7.0% Accessed April 20, 2015 from http://corporate.persimmonhomes.com/investors/five-year-financial-summary Notes 1. ** The average selling price has been calculated before they have been adjusted to fair value as required by IAS18. 2. All figures include the good will and other exceptional items. 3. * The marked figure has been restated to rhyme with IAS19 employees revised benefits. It is evident in the data above that the company welfare financially has been improving with time. The revenue from year 2010 to year 2014 has increased gradually from £1,569.5m in year 2010 to 13,509 in the year 2014. Revenue being a complement of sales has also increased proportionally. Ratio analysis for Taylor Wimpey plc and persimmon plc Note: all amounts are in million and in Euro currency (£) The above information has just focused on the general performance of the two companies. In this section, the in-depth performance of the two companies will be analyzed using several ratios and comparing the two company performance in the housing industry. 1. THE SHORT-TERM LIQUIDITY OF THE FIRM As stated by Bardhan, Edelstein and Tsang, (2006:36), short-term liquidity of firm is financial status of the firm that enables it meet it short-term obligation like wage payment, pay for day today expenses of the firm, maintenances cost, fare, purchase of office stationery among others. It also involves the ability of firms to sell assert quickly and obtain cash. It can be calculated using a ratio like, a. Current ratio Current =Current assets / Current liabilities According to the standard, a current ratio of 2:1 or 2.0 is acceptable. At ratio 2:1, the company can still be able to pay its current expenditure, but it is not assured that it can be able to pay a huge working capital. When this ratio falls below 1, then the company cannot be able to meet its current expenses and may be forced to dispose some of its assets or such for money elsewhere to get cash to finance its operations. The current ratio of the two companies for the last five years will be will be, Persimmon plc Year 2014 2013 2012 2011 2010 Net current asset 2,850.20 2,484.00 2,300.90 2,099.20 2,260.00 Net current liabilities 832.70 741.20 599.50 561.20 583.00 Current ratio 3.422 3.351 3.836 3.740 3.877 The company in its last five years of operation has been able to finance its day to day operation at ease. According to standard the current ratio should be greater than 2:1 and Persimmon plc has been able to meet the standard and exceed it. The firm’s average ratio is around 3.5 which means that it did not have difficulties in meeting its operating expenses. The ratio is not taking any pattern but it keep changing but in the same range. Taylor Wimpey plc Year 2014 2013 2012 2011 2010 Net current asset 3,813.30 3,160.50 3,084.90 2,917.70 3,795.60 Net current liabilities 958.20 829.80 865.70 844.80 1,127.50 Current ratio 3.980 3.809 3.566 3.4537 3.366 As displayed by this data, it is clear that the company has surpassed the set limit of ratio 2:1 in all its five year of operation. The company has an upward pattern of its liquidity ratio, meaning the firm’s ability to pay its daily operating expenses has improved down the line. Comparing the two firms, if the figures were not manipulated in any way Taylor Wimpey plc, which has a predictable pattern is performing better than Persimmon plc which, current ratio keep changing and hence to predict its future operation is difficult. 2. LONG TERM PERFORMANCE OF THE FIRM/SOLVENCY. Solvency is the company’s capacity to meet its long-term financial objectives. According to Lin & Vandell, (2007 p 212), a solvent company is one that owes more to other parties than what other the party owes to them. It is one with un-manageable loan burden. There several ratios that can be used to calculate firm’s solvency. They include a. Debt to equity ratio. Firm’s solvency can be calculated using debt to equity ratio. An increasing ratio indicates the risk a financier would be willing to take by lending money to the company. A ratio of more than one will mean that the shareholders equity available cannot be able to pay the outstanding loan. Debt to equity = Total debt / Total equity This ratio also indicates the degree of financial advantage in any business. Debt-to-equity ratio project that increasing interest expenses is not good for the company and beyond a certain point it might affect a company’s credit rating and therefore not being able to acquire loans easily. A decreasing debt: equity ratio shows that the firm will be able to meet its long-term obligations. The two companies’ ratios are as shown below. Persimmon plc Year 2014 2013 2012 2011 2010 Total debt 1,163.70 977.40 805.40 734.30 980.60 Total equity 2,192.60 2,045.50 1,993.70 1,839.30 1,744.00 Debt :ratio 0.5310 0.4778 0.4039 0.3992 0.5622 The debt ratio according to the data is favorable. The company can be able to meet all its debt with the equity available. Taylor Wimpey plc Year 2014 2013 2012 2011 2010 Total debt 1,604.50 1,313.30 1,560.80 1,537.80 2,502.10 Total equity 2,535.30 2,251.80 1,989.50 1,835.00 1,823.10 Debt :ratio 0.600 0.583 0.7845 0.837 1.3724 The company’s debt ratio is suitable in that the company can be able to meet all its debt with equity available. The company is also utilizing a lot of outside resources to finance its operation as compared to the persimmon. b. Long term debt ratio- this measure’s the proportion of fixed assets financed by non- owner capital in the business. Long term debt ratio= the ratio should be considerable, but it should not be greater than one. It is good to have long term liabilities as compared to short term liabilities, but long term liabilities should not be allowed to exceed the net assets. Long term debt ratio for Persimmon plc. Year 2014 2013 2012 2011 2010 Long term liabilities 331.00 236.20 205.90 173.10 397.60 Net assets 2,192.60 2,045.50 1,993.70 1,839.30 1,744.00 Return on investment 0.15 0.12 0.10 0.094 0.227 This company has a sustaining net asset to finance the long term liabilities. In case the firm is to be wide up, anyone who the firms owe money will be compensated fully. Long term liability for Taylor Wimpey plc. Year 2014 2013 2012 2011 2010 Long term liabilities 646.30 483.50 695.10 693.00 1,374.60 Net assets 2,535.30 2,251.80 1,989.50 1,835.00 1,823.10 Return on investment 0.25 0.21 0.34 0.37 0.75 The company can meet all its long-term liability with no struggle. The ratio proves that the company has been able to generate assets to be able to finance its operation rather than borrowing. 3. PROFITABILITY RATIO IN RELATION TO INVESTMENT. Ratio in this are used to determine the efficiency of asset invested in the business (Masterman, 2011:70). These ratios may include: a. Return on investment (ROI) = net profit after taxes/total assets ×100 Return on investment for Persimmon plc. Year 2014 2013 2012 2011 2010 Net profit after taxes 372.00 257.20 167.50 109.00 115.30 Total assets 3,356.30 3,022.90 2,799.10 2,573.60 2,724.60 Return on investment 11.08% 8.504% 5.967% 4.236% 4.221% The invested assert has been gaining value of the return they give to the firm with time. If the trend continues, the firm total assets are likely to yield more in future. Return on investment for Taylor Wimpey plc. Year 2014 2013 2012 2011 2010 Net profit after taxes 374.40 239.80 228.60 55.90 174.70 Total assets 4,139.80 3,565.10 3,550.30 3,372.80 4,325.20 Return on investment 9.035% 6.726% 6.778% 1.657% 4.039% The firm’s assets have a positive yield and if this trend continue, the company’s future is brighter than the past. Comparing the two firms, Persimmon plc assets are earning more yield as compared to Taylor Wimpey plc. Taylor Wimpey plc, therefore need to plan their asset better to earn a greater yield. b. Return on capital employed(ROCE) Ryan (2007:49) argues that this is a ratio that compares the net profit after tax of the company with the net asset (total asset- total liabilities) of the company. ROCE=  It is the rate at which the asset employed, give back to the organization. Return on capital employed for Persimmon plc. Year 2014 2013 2012 2011 2010 Net profit after taxes 372.00 257.20 167.50 109.00 115.30 Net assets 2,192.60 2,045.50 1,993.70 1,839.30 1,744.00 Return on investment 16.96% 12.57% 8.401% 5.926% 6.6112% The yield at which the company assets are giving to the company is promising. According to the data, it is evident that the company net assets efficiency in earning for the company is increasing and with the trend, investors mostly who trade on stock can invest in the company. Return on capital employed for Taylor Wimpey plc. Year 2014 2013 2012 2011 2010 Net profit after taxes 374.40 239.80 228.60 55.90 174.70 Net assets 2,535.30 2,251.80 1,989.50 1,835.00 1,823.10 Return on investment 14.75% 10.65% 11.46% 3.046% 9.58% The company net assets yield of profit is encouraging because it is increasing with time. Comparing the two company, Taylor Wimpey plc should improve on their assert planning to increase on their productivity. c. Total asset turnover-this ratio is used to determine the rate at which the company is using it assets to enhance sales. It is calculated as: Total asset turnover = Return on investment for Persimmon plc. Year 2014 2013 2012 2011 2010 Net profit after taxes 2,573.90 2,085.90 1,721.40 1,535.00 1,569.50 Total assets 3,356.30 3,022.90 2,799.10 2,573.60 2,724.60 Return on investment 76.68% 68.99% 61.50% 59.64% 57.59% The company has efficiently utilized its scarce resources and earn a lot of it. The trend is an upward efficiency meaning the firm’s future is awesome. Return on investment for Taylor Wimpey plc. Year 2014 2013 2012 2011 2010 Net profit after taxes 2,686.10 2,295.50 2,019.00 1,808.00 1,767.70 Total assets 4,139.80 3,565.10 3,550.30 3,372.80 4,325.20 Return on investment 64.88% 64.37% 56.87% 53.60% 40.87% The firm has also obtained a considerable return from the investment it has made but as compared with persimmon plc, it can be said that the firm has a room for improvement. 4. RATIO IN RELATION TO EQUITY PRODUCTIVITY a. Earnings per share (EPS) -this a ratio that shows earning per each share held by the shareholders of any company (Jennifer, 2013:35). EPS=  Persimmon plc. Year 2014 2013 2012 2011 2010 Basic earnings per share* 124.5p 83.3p 56.7p 35.7p 23.8p Diluted earnings per share* 124.3p 82.8p 56.2p 35.5p 23.7p Accessed April 20, 2015 from http://corporate.persimmonhomes.com/investors/five-year-financial-summary The Persimmon plc share is doing extremely very well and it is a good zone for investors to invest. The earnings per share have been increasing in great margin down the line. Taylor Wimpey plc. Year 2014 2013 2012 2011 2010 Basic earnings per share* 11.50p 7.30p 7.00p 1.70p 5.30p Diluted earnings per share* 11.20p 6.70p 4.60p 2.10p -1.50p Accessed April 20, 2015 from https://www.taylorwimpey.co.uk/corporate/investor-relations/reporting-centre/2015 Though as compared to persimmon plc, Taylor Wimpey is not doing so fine, it share earnings are improving at a good rate .since the share is not such costly, investors in shares may be advised to invest since the average return will be greater. b. Dividend per share- this ratio indicates the amount of money each share held in the company will generate. Many investors who trade in stock and securities will go for shares, which earn a high dividend to the shareholders. Dividend per share=  Persimmon plc. Year 2014 2013 2012 2011 2010 Dividend per share 95.0p 70.0p 75.0p 10.0p 7.5p The company has been accomplishing one of its major objectives of wealth maximization to its shareholders. The dividend is impressive and anyone may be interested in investing in it. Though the dividend may be due to little outstanding shares, the company is performing exemplary well (Norman, 2009:131). Taylor Wimpey plc. Year 2014 2013 2012 2011 2010 Dividend per share 1.56p 0.69p 0.62p 0.38p n/a The dividend paying rate has not been so good in the past but with increasing trend, shareholders have a reason to be happy since the commission they get to share they have is increasing with time. c. Equity multiplier ratio- this a ratio used to determine the amount of firm’ s asset that are financed by the total assets. Equity multiplier ratio =  the ratio should be considerable and should not exceed 2:1. Persimmon plc. Year 2014 2013 2012 2011 2010 Total assets 3,356.30 3,022.90 2,799.10 2,573.60 2,724.60 Total shareholders’ equity 2,192.60 2,045.50 1,993.70 1,839.30 1,744.00 Ratio 1.530 1.516 1.4039 1.3992 1.5622 The ratio has been favorable for the past five years and therefore the future may hold the same too Taylor Wimpey plc. Year 2014 2013 2012 2011 2010 Total assets 4,139.80 3,565.10 3,550.30 3,372.80 4,325.20 Total shareholders’ equity 2,535.30 2,251.80 1,989.50 1,835.00 1,823.10 Ratio 1.6328 1.139 1.784 1.837 2.3724. The company had excess of asset as compared to equity in year 2010 but has been able to uphold the ratio in all other years. The trend is clear that the firm apart from other sources of finance, it is also depends on shareholder equity to a greater extent. 5. PROFITABILITY RATIO RELATED TO SALES Operating profit margin- from Albrecht (2008:965) arguments, this ratio measure’s firm ability to control its production decision. It measure’s the firm operation health. Gross profit margin of the firm should be constant or gradually increasing for a healthy business. Fluctuating gross profit margin shows that the firm is not stable on it production. Operating profit in this industry is the difference between sales and cost of sales meaning, hence the constant ratio since even if the firms increase sales, cost of sale should also increase. The firm in the same industry has nearly the same gross profit margin. If the firm deviate, then there is an internal build problem. Gross profit margin = Gross profit margin for Persimmon plc. Year 2014 2013 2012 2011 2010 Gross profit 465.30 340.60 219.20 161.90 204.10 Sales /revenue 2,573.90 2,085.90 1,721.40 1,535.00 1,569.50 Gross profit margin 18.08% 16.32% 12.73% 10.54% 13.01% The trend is a positive one increasing gradually from year 2011 after a fall from year 2010.The gradual rise of gross profit margin is realistic and show a greener future for the company. Gross profit margin for Taylor Wimpey plc. Year 2014 2013 2012 2011 2010 Gross profit 496.80 355.30 223.70 152.50 45.10 sales 2,686.10 2,295.50 2,019.00 1,808.00 1,767.70 Gross profit margin 18.49% 15.47% 11..07% 8.434% 2.552% The trend is a positive one increasing gradually from year 2010 but the profit made in the year 2010 is questionable (2.552%) whereas the industry margin as given by Persimmon plc seems to range at 10% margin. The company too has a bright future, according to the positive trend. Analysing the ratios above, although Taylor Wimpey plc is making a lot of sales as compared to Persimmon, the efficiency is greater in Persimmon than in Taylor Wimpey plc. The efficiency may be due to its smaller size but with such trend, it will perform very well in future. Adoption of the UK Corporate Governance Code by Persimmon plc According corporate governance code of the United Kingdom (2012:1), “The financial reporting council does not give any room for liability in case one of the parties is involved in a loss that leads to damage or costs that has to be incurred. To ensure that the financials statements of the company are correct and other code in the constitution are being upheld, Persimmon plc have. 1. Corporate leadership- the company has a well-established leadership board which will see its future success. Each leader has specific duties entrusted to him orher to ensure that power scramble does not occur in the organization. As required by the law, the company has a board of management . 2. Effectiveness- according to governance code, any given company should have a board of management with competent skills to discharge their duties. Directors should dedicate enough time to serve the company and should be attending meetings where major decisions are made. All directors should be submitted for re-election at regular basis such that underperforming directors may be replaced by performing directors. In this, Persimmon plc has structured a plc board which is responsible in ensuring that all directors are qualified and their ethics in serving the company are observed and attended to when broken. 3. Accountability- in this, Persimmon plchas come up with a plc board that ensure that the directors and the management is acting too the well-being of the company but not enriching themselves. The company has a risk committee responsible in maintaining all short term and strategic plan to ensure that the firm management does not come up with a risky program which may keep companies at stake. The company has a corporate responsibility committee held by Marion Sears which ensure that the firm management and any underperforming director can be identified and action be taken. 4. Performance appraisal and competent skill- the company has a well-defined human resource department that ensures quality skills of employees are being acquired and plc board responsible for evaluating the competence of all the employees including the directors approves them in position. The company has division directors to ensure that workload to one director is not too much and as a result the firm productivity increase. 5. Relation to shareholders- in this section, shareholders should be alerted on all objective of the firm and approves them. It is also the role of shareholders to approve the appointed director. In this case, the company conduct an annual general meeting each and every year to communicate their views to shareholders. 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Journal of Real Estate Portfolio Management, 8:38-40 pp. APPENDIX CONSOLIDATED FIVE YEAR REPORT FOR PERSIMMON PLC AND TAYLOR WIMPEY PLC CONSOLIDATED FINANCIAL DATA FOR PERSIMMON PLC Income Statement: 31/12/2014 31/12/2013 31/12/2012 31/12/2011 31/12/2010   (Millions) (Millions) (Millions) (Millions) (Millions) Revenue: 2,573.90 2,085.90 1,721.40 1,535.00 1,569.50 Operating Profit / (Loss): 465.30 340.60 219.20 161.90 204.10 Net Interest: 1.70 (3.50) (1.00) (14.70) (50.40) Profit Before Tax: 467.00 337.10 218.20 147.20 153.90 Profit after tax from continuing operations: 372.00 257.20 167.50 109.00 115.30 Discontinued Operations:  Profit after tax from discontinuing operations: n/a n/a n/a n/a n/a Profit for the period: 372.00 257.20 167.50 109.00 115.30 Attributable to:  Equity holders of parent company: 372.00 257.20 167.50 109.00 115.30 Minority Interests / Other Equity: n/a n/a n/a n/a n/a Total Dividend Paid: c n/a c n/a c n/a c 10.00 c 7.50 Retained Profit / (Loss) for the Financial Year: c n/a c n/a c n/a c n/a c n/a Earnings per Share:  Basic: 121.80p 84.70p 55.40p 36.10p 38.30p Diluted: 121.70p 84.20p 54.90p 35.90p 38.10p Adjusted: 124.50p 83.30p 56.70p 36.80p 24.80p dividend per share 95.0p 70.0p 75.0p 10.0p 7.5p Balance Sheet: DEC 2014 DEC 2013 DEC 2012 DEC 2011 DEC 2010   (Millions) (Millions) (Millions) (Millions) (Millions) Assets:  Non-Current Assets:  Property, Plant & Equipment: 33.40 31.80 29.90 28.70 29.10 Intangible Assets: 229.90 237.90 244.50 250.80 255.50 Investment Properties: n/a n/a n/a n/a n/a Investments: 3.00 3.00 3.00 3.00 2.80 Other Financial Assets: 201.30 215.40 202.90 164.00 135.60 Other Non-Current Assets: 38.50 50.80 17.90 27.90 41.60   506.10 538.90 498.20 474.40 464.60 Current Assets:  Inventories: 2,408.20 2,194.90 2,051.00 2,003.40 2,073.20 Trade and Other Receivables: 62.70 83.90 47.30 52.80 50.00 Cash at Bank & In Hand: 378.40 204.30 201.50 41.00 126.80 Current Asset Investments: n/a n/a n/a n/a n/a Other Current Assets: 0.90 0.90 1.10 2.00 10.00   2,850.20 2,484.00 2,300.90 2,099.20 2,260.00 Other Assets: n/a n/a n/a n/a n/a Total Assets: 3,356.30 3,022.90 2,799.10 2,573.60 2,724.60 Liabilities:  Current Liabilities:  Borrowings: n/a n/a n/a 0.10 48.40 Other Current Liabilities: 832.70 741.20 599.50 561.10 534.60   832.70 741.20 599.50 561.20 583.00 Net Current Assets: c n/a c n/a c n/a c n/a c n/a Non-Current Liabilities:  Borrowings: n/a n/a n/a n/a 155.50 Provisions: 17.80 22.40 20.70 19.60 21.80 Other Non-Current Liabilities: 313.20 213.80 185.20 153.50 220.30   331.00 236.20 205.90 173.10 397.60 Other Liabilities: n/a n/a n/a n/a n/a Total Liabilities: 1,163.70 977.40 805.40 734.30 980.60 Net Assets: 2,192.60 2,045.50 1,993.70 1,839.30 1,744.00 Capital & reserves:  Share Capital: 30.60 30.50 30.30 30.30 30.30 Share Premium Account: 103.40 160.00 234.20 233.60 233.60 Other Reserves: 418.10 358.10 281.40 281.40 281.40 Retained Earnings: 1,640.50 1,496.90 1,447.80 1,294.00 1,198.70 Shareholders’ Funds: 2,192.60 2,045.50 1,993.70 1,839.30 1,744.00 Minority Interests / Other Equity: n/a n/a n/a n/a n/a Total Equity: 2,192.60 2,045.50 1,993.70 1,839.30 1,744.00 This data includes discontinued activities, assets due in more than one year, borrowings and Total fixed assets which are not disclosed under IFRS. CONSOLIDATED FINANCIAL DATA FOR TAYLOR WIMPEY PLC. Income Statement: 31/12/2014 31/12/2013 31/12/2012 31/12/2011 31/12/2010   (Millions) (Millions) (Millions) (Millions) (Millions) Revenue: 2,686.10 2,295.50 2,019.00 1,808.00 1,767.70 Operating Profit / (Loss): 496.80 355.30 223.70 152.50 45.10 Net Interest: (30.60) (52.30) (21.90) (75.10) (199.60) Profit Before Tax: 468.80 306.20 204.20 78.60 (154.80) Profit after tax from continuing operations: 374.40 239.80 228.60 55.90 174.70 Discontinued Operations:  Profit after tax from discontinuing operations: n/a 31.30 n/a 43.10 84.60 Profit for the period: 374.40 271.10 228.60 99.00 259.30 Attributable to:  Equity holders of parent company: 374.40 271.40 228.60 99.00 259.30 Minority Interests / Other Equity: n/a (0.30) n/a n/a n/a Total Dividend Paid: c 1.56 c 0.69 c 0.62 c 0.38 c n/a Retained Profit / (Loss) for the Financial Year: c n/a c n/a c n/a c n/a c n/a Earnings per Share:  Basic: 11.60p 7.50p 7.20p 1.80p 5.50p Diluted: 11.50p 7.30p 7.00p 1.70p 5.30p Adjusted: 11.20p 6.70p 4.60p 2.10p -1.50p Dividend per Share: 1.56p 0.69p 0.62p 0.38p n/a Balance Sheet: 31/12/2014 31/12/2013 31/12/2012 31/12/2011 31/12/2010   (Millions) (Millions) (Millions) (Millions) (Millions) Assets:  Non-Current Assets:  Property, Plant & Equipment: 16.80 8.30 7.10 5.00 7.60 Intangible Assets: 2.50 4.20 5.20 5.10 3.40 Investment Properties: n/a n/a n/a n/a n/a Investments: 38.60 34.70 31.50 31.90 49.70 Other Financial Assets: n/a n/a n/a n/a n/a Other Non-Current Assets: 268.60 357.40 421.60 413.10 468.90   326.50 404.60 465.40 455.10 529.60 Current Assets:  Inventories: 3,490.10 2,928.80 2,788.80 2,686.60 3,436.20 Trade and Other Receivables: 110.40 126.30 105.70 83.40 175.50 Cash at Bank & In Hand: 212.80 105.40 190.40 147.70 183.90 Current Asset Investments: n/a n/a n/a n/a n/a Other Current Assets: n/a n/a n/a n/a n/a   3,813.30 3,160.50 3,084.90 2,917.70 3,795.60 Other Assets: n/a n/a n/a n/a n/a Total Assets: 4,139.80 3,565.10 3,550.30 3,372.80 4,325.20 Liabilities:  Current Liabilities:  Borrowings: n/a n/a n/a n/a 15.10 Other Current Liabilities: 958.20 829.80 865.70 844.80 1,112.40   958.20 829.80 865.70 844.80 1,127.50 Net Current Assets: c n/a c n/a c n/a c n/a c n/a Non-Current Liabilities:  Borrowings: 100.00 100.00 249.40 264.60 823.30 Provisions: 1.00 6.00 10.70 18.50 43.70 Other Non-Current Liabilities: 545.30 377.50 435.00 409.90 507.60   646.30 483.50 695.10 693.00 1,374.60 Other Liabilities: n/a n/a n/a n/a n/a Total Liabilities: 1,604.50 1,313.30 1,560.80 1,537.80 2,502.10 Net Assets: 2,535.30 2,251.80 1,989.50 1,835.00 1,823.10 Capital & reserves:  Share Capital: 288.30 288.10 288.00 287.70 287.70 Share Premium Account: 762.90 760.20 758.80 754.40 753.70 Other Reserves: 31.10 24.90 28.70 38.30 100.80 Retained Earnings: 1,451.90 1,177.50 912.60 753.10 679.40 Shareholders’ Funds: 2,534.20 2,250.70 1,988.10 1,833.50 1,821.60 Minority Interests / Other Equity: 1.10 1.10 1.40 1.50 1.50 Total Equity: 2,535.30 2,251.80 1,989.50 1,835.00 1,823.10 This data includes discontinued activities, assets due in more than one year, borrowings and Total fixed assets which are not disclosed under IFRS. 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