Builder Profits Come Tumbling Down Posted on August 27th
8:31am UK, Wednesday August 27, 2008
Britain’s largest housebuilder has announced a 96% drop in profits for the first half of the year.
House building has been hit hard by credit crunch and property market slowdown.
Taylor Wimpey’s profits shrank to £4.3m, down from last year’s figure of £119.8m.
The firm, which builds more UK homes than any other, racked up overall pre-tax losses of £1.54bn.
This came from a £690m write-off from the value of its land bank plus £816m lost through the merger of Taylor Woodrow and George Wimpey last year.
Debt-laden Taylor Wimpey also said it was working to amend its borrowing agreements, and said it hoped these would be finalised by the end of the year.
It also said it was scrapping its interim dividend due to challenging market conditions in the UK, US and Spain.
The news comes a day after Bovis Homes added to the housing market gloom with a large fall in profits.
It reported half-year adjusted pre-tax profits down by 80% to £11.7m, compared with £58.4m in the same period in 2007.
Bovis said it had experienced “the toughest period of trading…in its life as a public company”.
The last few months have seen thousands of jobs axed as the housebuilding industry is hit by the credit crunch and the slowdown in the property market.
Taylor Wimpey announced in July that it would be cutting 900 jobs.