Housebuilder Taylor Wimpey shows confidence with dividend hike

By Paul Sandle LONDON (Reuters) - British housebuilder Taylor Wimpey said it had seen a strong start to the spring selling season as it posted a 68 percent rise in 2014 profit and more than doubled its final dividend. The company said investments in land over the last five years were enabling it to improve profitability and returns to shareholders as the market recovered. "The beginning of spring selling season has seen trading at the better end of expectations," Chief Executive Pete Redfern said on Tuesday. Redfern said Taylor Wimpey had improved its operating margin by 430 basis points to 17.9 percent in 2014. Adjusted pretax profit came in at 450.1 million pounds, broadly in line with market expectations. The group, which completed 12,454 homes across the UK in 2014, proposed a final dividend of 1.32 pence per share, up from 0.47 pence a year ago, in addition to special payouts including a 7.68 pence per share payment already announced which will be paid in July. Redfern said the group would announce another special dividend at its half-year results of around the same level as the July payout. Shares in Taylor Wimpey touched a seven-year high of 149.9 pence on Tuesday, and were trading up 0.9 percent at 146.2 pence by 9.51 a.m.. Analysts at Jefferies said the highlight of the results was the doubling of the dividend. "Often a high yield reflects risk, however, in our view the cash generating ability of Taylor Wimpey has never been stronger and it remains wedded to its soft volume cap of 14,000 units, which provided strong dividend visibility in current market conditions," they said. Housebuilding has moved up the political agenda in Britain ahead of a general election in May, as the supply of new homes continues to lag demand. The ruling Conservative Party said on Monday that 200,000 homes would be made available to first-time buyers in England by 2020 if it won the election, while the opposition Labour Party also said housing would be a top priority. Redfern said Taylor Wimpey would continue to increase volumes, but that sustainability was the watchword. "We'd rather deliver a solid sustainable level of growth," he said. "You get to a better place whether you are looking at financial performance or whether you are looking at total housing deliveries over time." (Editing by Li-mei Hoang and Pravin Char)