Taylor Wimpey reveals falling profits

Source: Construction Digital

Date :18/04/2008 16:13:04

The UK’s biggest housebuilder, Taylor Wimpey revealed yesterday its falling profits and gave a gloomy forecast for the remainder of the year, adding to the depression of the nation’s housing market.

The company warned that its profits would come close to the bottom of their previous predictions, due to “weakened” market conditions.

After announcing last month its first loss in 15 years, Taylor Wimpey said the deceleration would mostly affect first-time buyers. The group said it was worsened by the deteriorating mortgage famine, as banks suffering finance difficulties withdraw a large majority of their most favoured offers from the market.

"Sales rates remain significantly below those of the equivalent period of 2007 on a pro forma basis, with higher levels of cancellations being experienced,” the company said.

Order book

The company’s order book seems to be falling each year and is now said to be worth less than 26 percent last year, which was shoddier than the twenty percent decrease of last month.

The company has lost more than half its value since it was born in the heady final days of the market boon assisted with £5.5 billion union of Taylor Woodrow and George Wimpey. It was worth just £1.67 billion after yesterday’s close.

Its heavy exposure to America seems to take its toll on the group. With the US housing crisis gaining momentum, and the company having heavy writedowns on its US business last year, the company says its expects the market to remain declining for the rest of the year.

April18 2008