Top UK Stocks to Watch: Taylor Wimpey restarts dividends

Taylor Wimpey confident it can recover after a troublesome year, Renishaw shares pop to an all-time high because it puts itself up purchasable , Travis Perkins enters the red, and Flutter Entertainment’s revenues quite double.
Top News: Taylor Wimpey hit by lockdown but expects to recover in 2021
Taylor Wimpey said revenue and profits plunged in 2020 because it built fewer houses due to the pandemic, but said it had been resuming dividends and assured about its prospects thanks to its record order book.

The housebuilder said it only managed to construct 9,799 homes during 2020 compared to 16,042 homes in 2019. This was primarily thanks to a shutdown in activity within the second quarter of the year when the pandemic erupted, with construction levels returning to ‘near normal levels’ within the last half .

Notably, Taylor Wimpey said it still expects output in 2021 to be adequate to about 85% to 90% of the amount completed before the pandemic in 2019.

Revenue dropped by quite one-third to £2.79 billion from £4.34 billion. That, twinned with a way tighter operating margin of just 10.8% versus 19.6% the year before, saw operating profit plunge by 65% to £300.3 million from £850.5 million. Pretax profit was down 68% to £264.4 million from £835.9 million.

Taylor Wimpey is hoping its operating margin will improve to 18.5% to 19% this year and it’s still targeting 21% to 22% over the medium-term.

Taylor Wimpey said it had a record forward order book that stood at 10,685 homes at the top of the year, up from 9,725 at the top of 2019. Taylor Wimpey is 50% sold for 2021.

The housebuilder said it had been restarting dividends with a final payout of 4.14 pence per share. that’s underpinned by a robust record with net cash having climbed to £719.4 million from £545.7 million during the year, bolstered by over £500 million raised in equity in June 2020.

‘The 2021 selling season has started well, following on from the stronger than expected recovery of the housing market within the last half of 2020 and reflecting the underlying strength of demand, underpinned by low interest rates and stable mortgage lending,’ Taylor Wimpey said.

Where next for the Taylor Wimpey share price?
Taylor Wimpey shares are trading over 3% higher in early trade because the stock attempts to maneuver out of the holding channel within which it’s traded since early December.

Taylor Wimpey has pushed above its 50 sma sand trades above its 100 sma, whilst the RSI is supportive of further upside.

A meaningful break through the upper band of the channel at 172 could see TW head towards 180p and level last seen in early March.

However, 172p has capped several attempts to maneuver higher over the past three months. Should the resistance hold, a move lower to check the 50 sma support at 161p might be on the cards. an opportunity below this level could see the 100 sma at 150p tested, although this looks unlikely near term.

Flutter Entertainment sees revenue quite double in 2020
Flutter Entertainment said revenue and adjusted earnings quite doubled in 2020 because of its transformational merger with the celebs Group.

Flutter Entertainment said revenue rose to £4.39 billion in 2020 from just £2.14 billion the year before, with adjusted Earnings before interest, tax, depreciation and amortisation jumping to £889 million from £425 million. That was predominantly because of the acquisitions of the celebs Group.

However, the acquisition costs weighed on its bottom-line, with pretax profit plunging to only £1 million from £136 million in 2019. No dividend was declared for the year.

The company said it had managed to take care of its leadership online, with 96% of its revenue coming from digital products. It said it’s maintained it leadership within the US with 40% of the web sports betting market and 20% of the web gaming market.

‘We delivered a really strong financial performance in 2020, taking advantage of our scale and diversification. We still grow our recreational player base across all key regions, in Q4 alone the group had over 7.6 million monthly online players. Nowhere has our growth been more evident than within the US where we’ve consolidated our #1 position during this crucial market, with customer economics that still exceed our expectations, finishing the year because the first US online operator to succeed in over $1.1 billion in gross gaming revenue,’ said chief executive Peter Jackson.

Flutter Entertainment said it had seen momentum integrate 2021, with revenue up 36% within the seven-weeks to February 21. Still, lockdown within the UK and Ireland means its physical stores are still closed and costing around £9 million in earnings per month.

Flutter Entertainment shares were up 0.4% in early trade at 14428.0.

Croda International ups dividend after mixed performance
Croda International said it delivered a record performance from its Life Sciences division during 2020, partly driven by its involvement within the distribution of vaccines and other pandemic equipment, which it’s restructuring other parts of the business that found it tougher .

Croda International said revenue rose 0.9% to £1.39 billion from £1.37 billion the year before, with core sales rising 2.2%.

Adjusted operating profit declined 5.9% to £319.6 million and fell 9.3% on a reported basis to £290 million. Adjusted pretax profit was down 6.7% to £300.6 million and dropped 10.9% on a reported basis to £269.5 million.

Still, Croda said it had lifted its dividend for the year by 1.1% to 91.0 pence from 90.0p in 2019.

Croda said its Life Sciences division had a record year as revenue jumped 14.6% and adjusted operating profit leapt 20.8%. That has been boosted by the acquisitions of Avanti and Iberchem during the year, and a serious contract to assist with the Pfizer-BioNTech vaccine.

It said it had been now combining its care , Home Care and Fragrances divisions to make one ‘market-leading Consumer Care platform’ after sales suffered during lockdown as people stayed reception and purchased fewer beauty and ‘going-out’ products.

Its smaller Performance Technologies division reported a 3.2% drop by sales and a fall in adjusted operating profit of twenty-two .2%.

‘While continued COVID-19 restrictions make the near-term outlook for elements of our Consumer Care and Performance Technologies sectors difficult to predict, 2020 sales exit rates were encouraging with consumer and industrial end markets showing signs of recovery. Life Sciences is predicted to stay strong. the advantages of recovery, along side the complete year impact of Avanti, Iberchem and our Pfizer-BioNTech COVID-19 vaccine contract, are expected to support profitable growth across the business,’ said Croda.

Separately, Croda said it’s bought Alban Muller for EUR25 million. The French company creates and supplies natural and botanical ingredients for the worldwide beauty industry and generated EUR18 million revenue during the year to the top of June.

‘The acquisition expands Croda’s portfolio of sustainable active ingredients for patrons in care markets, complementing our industry-leading positions with Sederma and Crodarom,’ said the corporate .

Croda International shares were up 0.4% in early trade at 6320.0.

Fresnillo benefits from higher prices and lower costs
Fresnillo said production dipped in 2020 but that revenue and earnings both improved significantly because of higher prices and lower costs, because it hopes to cause new output capacity this year.

The gold and silver miner said silver production was down 2.9% in 2020 to 53.0 million ounces while gold output suffered a bigger fall of over 12% to 769,618 ounces.

Still, revenue benefited from higher prices and rose almost 15% to $2.43 billion from $2.11 billion the year before. gross profit margin soared over 90% higher to $879.4 million from just $461.7 million.

Earnings before interest, tax, depreciation and amortisation increased 73% to $1.16 billion from $674 million. Pretax profit leapt to $551.3 million from just $178.8 million in 2019.

The company said it’ll pay a final dividend of 23.5 cents for a complete dividend of 25.8 cents, which is up from 14.5 cents in 2019.

Fresnillo said production declined partly due to measures introduced to enhance safety during the pandemic, which has also delayed a number of its new projects. The miner said it the commissioning of the Juanicipio plant has been pushed back to the fourth quarter of 2021 which it expects it to be running at 40% to 50% by the top of this year. Fresnillo said ‘Juanicipio are going to be a serious think about the group’s future silver production’.

Production also will be boosted this year by the new Pyrites Plant at the Fresnillo mine that was brought online within the final quarter of the year, although final inspections are delayed due to the virus. The new floatation plant at the mine designed to require lead and zinc has also been completed and will benefit output this year.

‘Looking ahead, silver volumes will rise by steadily increasing production at Juanicipio, and therefore the multiple ongoing operational improvement programmes to extend production at Fresnillo. Lower ore grade at Ciénega, along side a reduced activity at Noche Buena following a change to the mining sequence and therefore the fewer available areas because the mine approaches its planned closure, also as slightly lower volumes at Herradura, are likely to steer to reduced gold production. However, the longer-term prospects for gold are good, supported by the potential new mines at Rodeo and Orisyvo,’ said Fresnillo.

Fresnillo shares were down 0.8% I nearly trade at 898.7.

National Grid tweaks dividend policy as investment to rise
National Grid said annual dividend increases are going to be linked to CPI instead of RPI from the 2022 fiscal year because it warned it’ll need to invest larger sums over the approaching years.

The grid operator’s dividend grows annually in line with the Retail price level (RPI) and this may remain the case within the current fiscal year thanks to end in 2021. However, from the 2022 fiscal year , the payout increase are going to be linked to the buyer Prices Index including occupiers’ housing costs (CPIH).

National Grid said the choice had been made following the foremost recent review conducted by regulator Ofgem, which proposes rules on what proportion market players can charge and descriptions what proportion they need to spend and invest annually .

‘We expect to take a position around £10 billion of capex through the course of the 5 year control , across our electricity and gas transmission networks. At nearly £2 billion once a year on the average , investment are going to be substantially above the RIIO-T1 control ,’ said National Grid.

However, National Grid said it might be appealing against Ofgem’s methodology wont to calculate the value of equity, and said this may kickstart a six-month process if it’s accepted by the regulator.

‘We believe that the methodology Ofgem wont to set the value of equity ignores evidence for higher total market return and risk-free rate levels. We also maintain the view that the outperformance wedge, a downward adjustment to allowed returns in expectation of future outperformance, is conceptually and practically flawed. We were disappointed it remained within the Final Determination,’ said National Grid.

‘If the CMA accepts to listen to our appeal, the six-month process will begin from April. supported timelines for similar processes, provisional findings would be expected around July with Final Determinations in early October,’ it added.

National Grid shares were up 0.9% in early trade at 831.0.