Housebuilder to close 13 of its 39 operating businesses after £1.54bn first-half loss
Taylor Wimpey has reported a loss of £1.54bn for the first half of 2008 after having to write down the value of assets including land.
The housebuilder said that “very challenging market conditions across the UK, US and Spain” had driven it into loss. By contrast, during the same period a year earlier it made a profit of £18.3m.
The announcement came as part of Taylor Wimpey's interim results released today, confirming the closure of 13 of its 39 operating businesses by the end of September. The group also admitted that it faced further overhead reductions in North America.
As revealed by Building, the group also indicated that it was poised to strike a deal with its banks to relax lending covenants without the need for fresh cash.
It had been due to breach loan-to-value covenants in February. The company said: “Constructive discussions with the relevant lenders are ongoing and the board is of the view that a satisfactory conclusion will be reached.”
Kaupthing analyst Kevin Cammack said: “On the crucial issue of refinancing, the group is saying it is in discussions with banks and expects to conclude a renegotiation by the year end. This now seems likely to be a Barratt-type waiver of old covenants in favour of a cash flow.”