Housebuilder Taylor Wimpey expects the UK housing market will remain weak at least through 2008 and does not anticipate any recovery in the short-term. It also confirmed that finance director Peter Johnson will step down by the end of the year.
The company's UK order book was 33% lower in value at June 29th than at the comparable point in 2007.
Taylor Wimpey has thus decided to close 13 of its 39 regional offices and reduce staffing levels across the business, with an anticipated loss of about 900 jobs.
The company added that its US housing market remains weak and added that it 'does not anticipate any material recovery until 2009 at the earliest'.
Canada, which has not experienced the same levels of house price inflation as the US and UK, has remained relatively stable. Completions in the first half this year were approximately 20% lower than last year.
The board said it does not expect to pay out an interim dividend but assured investors that it remains convinced of the fundamental attractions of the business over the medium and long term.
Taylor Wimpey, which had said Monday it was in talks to raise additional equity, said it has been unable to conclude a satisfactory transaction in light of current market conditions.
On Monday, Taylor Wimpey said it had agreed to amend the terms of its credit facility with its banks, but this was conditional on the company raising additional equity. Although currently trading within its banking covenants, the company said today it could breach one or more covenants at the first testing date in 2009 without raising further equity.
Story supplied by MoneyAM
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