TW ‘disappointed’ by bank talks

Pete Redfern, the chief executive, and Chris Rickard, the chief financial officer, gave the assessment after releasing an interim management statement on Tuesday that revealed that a previously announced restructuring had resulted in an additional 1,000 job losses. This brings the company’s total redundancies this year to 1,900.

Redfern: Further asset writedowns in the offing

The company said its current order book in the UK stood at 6,607 homes, compared with 11,074 at this point last year. It currently has 1,300 unsold homes in the UK, equivalent to eight weeks’ supply at current sales rates.

The company said housing conditions remained “extremely challenging”, and added that it may need to make further writedowns in the value of its landbank and work in progress.

The company was due to meet with bond holders this week to try to broker a solution to its financial difficulties. The company’s debt has now grown from £1.7bn to £1.9bn. It confirmed that it was unlikely to strike a deal with banks over a revised covenant structure until early next year.

Taylor Wimpey said it is reviewing ‘strategic options’ to reduce its debt, including a deal with providers of
equity capital and the sale of parts of its UK Landbank

The firm said it was reviewing other “strategic options” to reduce its debt, including a deal with providers of equity capital and the possibility of selling parts of its UK landbank.

Alastair Stewart, an analyst at Dresdner Kleinwort, said the consideration of other options to reduce debt was the “one sliver of upside” for Taylor Wimpey.

Stewart added that he believed aggressive discounting was behind the firm’s fall of 27% in net reservations, which compares favourably to its peers. He said: “Every housebuilder we have spoken to, quoted and private, alleges that Taylor Wimpey first and Barratt second are the most aggressive discounters in their markets and often have a destabilising effect.”