Taylor Morrison is cashing in on the favorable currency exchange rate Canadians now enjoy by marketing its houses in the U.S. to prospective second-home buyers in Canada through its sister company, Ontario-based Monarch Homes, which is one of that country's largest builders.
The Bradenton, Fla.-based Taylor Morrison has sent sales and marketing teams to Canada to work with their counterparts at Monarch to pitch the value of its homes in America-whose average selling price at the end of 2007 was $351,191-at a time when a Canadian dollar is worth $1.015 American dollars.
In a telephone conversation with BUILDER Online Thursday afternoon, Sheryl Palmer, Taylor Morrison's president and CEO, said her company has seen greater interest lately among Canadian buyers in its homes in Southern Florida and in California. "The Monarch brand is so credible," she said, pointing to Monarch being rated first in customer satisfaction in Ottawa last year by J.D. Power & Associates. "When buyers hear we're part of the same company, they know they are going to get the same quality house."
Palmer added that Taylor Morrison has arranged for buyers to visit its communities in America and is considering a promotion where it would pay for a prospect's trip if he or she purchases a house. "We're looking at doing the same promotion, too, in the U.K.," which Palmer said is one of the advantages of being part of an international operation.
Taylor Morrison and Monarch form the North American division of London-based Taylor Wimpey, which yesterday released its financial report for the year ended Dec. 31, 2007. Revenue from its North America division fell by 36.9 percent to the equivalent of $2.438 billion (using a conversion rate of one British pound to US$2.007), and profits from that division were off 81.5 percent to US$125.2 million, as the builder's operating margin fell to 5.1 percent of sales, from 17.5 percent the year before. The division closed 6,740 units last year, 23.7 percent fewer than in 2006. (All of these numbers reflect last year's merger of Taylor Woodrow and Morrison Homes, as if both companies were combined through the full year.) Taylor Morrison wrote down US$568.7 million in land and inventory impairments.
Palmer has been in her current position for six months, and she sounded surprisingly upbeat about the future, even as the parent company does not expect much improvement in business conditions this year. On Wednesday, the builder launched its redesigned Web site, and she said it is "way ahead of schedule" in bringing together Taylor Woodrow's and Morrison's accounting systems. Last month, the builder entered into an agreement with The Disney Co., Microsoft Corp., Hewlett-Packard Co., and software maker LifeWare to build a $15 million Innoventions Dream Home exhibit on the premises of Disneyland in Anaheim, Calif.
While she regrets the manpower cuts her 13-division company needed to make, Palmer believes Taylor Morrison is in much better shape to move forward. "We're focusing on our core business and controlling what we can control," she said. "We're getting to a good place." Then she was off to Lake Tahoe, Nev., where Taylor Morrison is sponsoring an event conducted by Special Olympic, on whose board Palmer sits.
Learn more about markets featured in this article: Orlando, FL.