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Taylor Wimpey hit by massive loss Taylor Wimpey hit by massive loss
(30 minutes later)
House builder Taylor Wimpey has reported a huge loss for the past six months after having to write down the value of assets including land. Housebuilder Taylor Wimpey has reported a huge loss for the past six months after having to write down the value of assets including land.
Including exceptional items, the firm slumped to a loss of £1.54bn in the six months to 30 June, compared with a £18.3m profit a year ago. The firm slumped to a loss of £1.54bn in the six months to 30 June, saying it faced "very challenging" conditions.
It was hit by the reduced value of land in the UK, US and Spain and the cost of downsizing its UK business.It was hit by the reduced value of land in the UK, US and Spain and the cost of downsizing its UK business.
The firm warned it faced "very challenging" market conditions. Excluding write-downs of asset values, Taylor Wimpey made a profit of £4.3m, down from £119.8m last year.
Sagging demand
The firm is cutting about 900 jobs in the UK as the squeeze on mortgage finance has severely reduced demand for new homes.
The first half of 2008 has been characterised by the very challenging trading conditions in the UK, US and Spain Norman Askew, Taylor Wimpey chairman
The UK market remained "very challenging", the firm said, with no imminent prospect of recovery.
Profits from its UK business fell 39% over the period.
The situation is similarly bleak in the US, where the firm's profits fell by 63% and in Spain, where profits fell 85%.
Tough conditions in all its major markets has forced the firm to write down the value of land its owns by £690m.
It is also writing down the value of other assets, including the George Wimpey brand that it bought last year, to the tune of £816m.
In addition, the firm had restructuring costs of £40m primarily relating to its UK housing business
"The first half of 2008 has been characterised by the very challenging trading conditions in the UK, US and Spain," said the firm's chairman Norman Askew.
But he added: "The board remains convinced of the fundamental value of the business over the medium and the long term."
However, Taylor Wimpey said it was in discussions with banks and other lenders about amending some of its borrowing agreements.