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| Taylor Wimpey hit by massive loss | Taylor Wimpey hit by massive loss |
| (about 1 hour later) | |
| Housebuilder Taylor Wimpey has reported a huge loss for the past six months after having to sharply reduce the value of its assets including land. | Housebuilder Taylor Wimpey has reported a huge loss for the past six months after having to sharply reduce the value of its assets including land. |
| The firm slumped to a loss of £1.54bn in the six months to 30 June, saying it faced "very challenging" conditions. | 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 lower value of its land in the UK, US and Spain, and the cost of downsizing its UK business. | It was hit by the lower value of its land in the UK, US and Spain, and the cost of downsizing its UK business. |
| Excluding these reductions in asset values, Taylor Wimpey made a profit of £4.3m, down from £119.8m last year. | |
| Shares in Taylor Wimpey were down nearly 11% at 46.5p in early morning trade. | |
| Sagging demand | 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 firm is cutting about 900 jobs in the UK as the squeeze on mortgage finance has severely reduced demand for new homes. |
| Other leading property developers, including Persimmon, Barratt Developments and Bovis Homes, have been forced to streamline their operations in response to the malaise in the market. | Other leading property developers, including Persimmon, Barratt Developments and Bovis Homes, have been forced to streamline their operations in response to the malaise in the market. |
| 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 class="" href="http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/shares/3/40764/intraday.stm">Taylor Wimpey share price | |
| The UK market remained "very challenging", Taylor Wimpey said, with no imminent prospect of recovery. | The UK market remained "very challenging", Taylor Wimpey said, with no imminent prospect of recovery. |
| Profits from its UK business fell 39% over the period. | 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%. | 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. | 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. | 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 | 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. | "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." | But he added: "The board remains convinced of the fundamental value of the business over the medium and the long term." |
| Bank discussions | Bank discussions |
| Taylor Wimpey said it was in discussions with banks and other lenders about amending some of its borrowing agreements. | Taylor Wimpey said it was in discussions with banks and other lenders about amending some of its borrowing agreements. |
| FROM THE TODAY PROGRAMME More from Today programme | |
| It has borrowed £1.7bn from the banks and has been seeking to renegotiate terms of the loans. | It has borrowed £1.7bn from the banks and has been seeking to renegotiate terms of the loans. |
| The firm failed to secure additional financing from its investors earlier this year, leading to a sharp fall in its share price. | The firm failed to secure additional financing from its investors earlier this year, leading to a sharp fall in its share price. |
| However, it stressed that its cash position was strong and it was "fully compliant" with its banking covenants. | However, it stressed that its cash position was strong and it was "fully compliant" with its banking covenants. |
| "We are focused on giving ourselves the flexibility to navigate through the market downturn and strengthen our position for a market recovery," the firm added. | "We are focused on giving ourselves the flexibility to navigate through the market downturn and strengthen our position for a market recovery," the firm added. |