Results of tough year for property and transport

Mar 1 2010 by Peter McCusker, The Journal

THERE will be no let-up for investors this week with results due from North East transport group Arriva and housebuilders Taylor Wimpey and Persimmon.

Housebuilder Taylor Wimpey was forced to rebuild its battered finances last year after a disastrously-timed merger but started 2010 on the front foot after a 62% rise in sale reservations.

A pre-close update last month showed the group’s UK order book for private house sales stood at 3,048 homes, compared with 1,887 at the start of 2009.

The company said market conditions were “stable” though concerns linger over economic prospects and reduced mortgage availability.

The group, which has operations in the US and Spain, was created from the merger of Taylor Woodrow and George Wimpey in 2007.

Annual results due on Wednesday should make slightly less grim reading than a year ago, when it unveiled eye-watering pre-tax losses of £1.97bn for 2008 due to huge write-downs on its landbank and goodwill on the merger.

This left the firm saddled with debt and struggling to survive before a re-financing deal last April gave it bank facilities totalling £2.47bn.

After the additional help from a £500m cash call on shareholders, debts stood at £750m at the end of 2009 – down by more than half on a year earlier.

Cazenove analyst Jeremy Withersgreen predicts a £145m loss for 2009 with the group not returning to profit until 2011. But he added: “With the UK housing market in the early stages of recovery and the potential disposal of the group’s North American activities a catalyst, we retain our outperform rating.”

Charles Church builder Persimmon which reported a solid start to the year with a 40% rise in forward sales on a year earlier, posts its own annual results on Tuesday.

The York-based firm admits that further progress depends on demand over the industry’s key spring selling season, but some analysts said Persimmon could produce a surprise.