Taylor Wimpey warns of further losses
Jan 14 2009 by Iain Laing, The Journal
TAYLOR Wimpey has warned of further losses due to tumbling land values as it struggles in “very challenging” markets.
The firm, which wrote off £586m in the summer, said it would need to make further provisions in the absence of any improvement in the UK.
Taylor Wimpey has taken action to reduce debts to £1.55bn – including shedding 1,400 jobs in 2008 – but has yet to conclude a refinancing deal with lenders to manage the burden.
The firm said in December it had deferred a crucial test of its banking covenants until the end of March. It hopes to have sealed a robust, stable, medium-term solution to its financing difficulties by then. Taylor Wimpey is also cutting back spending on land this year to less than £400m.
The group remains pessimistic over the chances of a short-term recovery in the UK housing market amid economic uncertainty and scarce mortgage availability.
Private reservations averaged 137 a week in the second half of last year, 39% below 2007. Over the whole year, completions fell 35% to 13,394, with average selling prices down from £188,000 to £171,000.
In the US, signs of increasing stability in the housing market were thwarted by the financial crisis which erupted during the second half of the year.
