(Adds detail on targets, analyst comment, shares)
May 15 (Reuters) - Taylor Wimpey Plc, Britain’s third-largest builder, said on Tuesday it aimed to build out its landbank quicker to boost efficiency, and raised its annual ordinary dividend from 2019.
As part of its new goals for the next five years to 2023, the company said it would reduce landbank years by about a year to 4-4.5 years.
British developers are under pressure from the government to develop unused land or “landbanks” or give them up as the country reels from a housing shortage.
Taylor Wimpey said due to the structural improvement in the planning environment, land is no longer the totally dominant constraint on the success and scale of its business, and for the industry.
The company building out its landbank quicker should increase the return on capital and lead to volumes increasing faster than originally expected over the next few years, said Liberum analyst Charlie Campbell in a note.
Jefferies said the planning system has improved significantly since the publication of the National Planning Policy Framework in 2012 and Taylor Wimpey believes that these improvements are sustainable.
“Obtaining planning permissions is easier than it was, therefore less land needs to be held to ensure surety of supply,” Jefferies said.
Taylor Wimpey said ahead of its capital markets day that market conditions continued to remain stable. It raised its ordinary dividend to at least 250 million pounds ($338.8 million) per annum from 2019, up from at least 150 million pounds earlier.
Taylor Wimpey also said it would pay a special dividend of 350 million pounds in 2019.
The company said its new five-year goals included an increase of return on net operating assets to 35 percent, up from its 2016-2018 target of 30 percent, and maintained its operating profit margin target of 21-22 percent.
Shares of Taylor Wimpey were up 2.6 percent at 200 pence by 0807 GMT. ($1 = 0.7380 pounds) (Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Gopakumar Warrier)