Newly merged housebuilder reports large writedown in the US but says integration will result in £100m cost savings
Taylor Wimpey’s first set of joint results have been hit by a write down of £86m in its American operation.
As a result pre-tax profit at the newly merged housebuilder fell from £160.8m to £18.3m for the six months ended 30 June 2007. Total revenue was £1.44bn.
The group said integration of the two businesses was progressing well. It said that pre-tax synergy savings had increased to £100m for the year. It also announced a £750m share buyback commencing today.
Taylor Wimpey reported a strong performance in the UK housing market and said interim operating profit had risen 38% to £159m.
However, it said recent interest rate rises would result in more subdued market conditions in the second half of 2007.
Taylor Wimpey said North American CEO John Landrum would be replaced by Sheryl Palmer. It said US staff would be cut by 25% by the end of the year.
Pete Redfern, Taylor Wimpey group chief executive, Taylor Wimpey said: “Given very difficult trading conditions, the respective performances in North America are substantially below the record results achieved in the first half of 2006.
“We have made excellent progress in the UK in the first half of 2007, with both Taylor Woodrow and George Wimpey demonstrating significant margin improvement.”