Indebted housebuilder Taylor Wimpey saw its share price fall 11 per cent after a trading statement warned of further writedowns to land and work in progress if current market conditions persist.
Its current order book is down 40 per cent on a year ago at 6,607 homes, and less-profitable affordable housing will account for 22 per cent of its 2008 completions, up from 15 per cent in 2007. Meanwhile, reservations are averaging 165 per week. While that is a 27 per cent year-on-year drop, it is less steep than other builders have reported, which suggests that Taylor Wimpey is aggressively discounting to win sales.
Net debt has risen from £1.7bn to £1.9bn, which is almost 90 per cent of shareholders' funds. Discussions with banks and bondholders are "complex" but said to be progressing. "It therefore remains likely that a revised covenant structure will only be concluded early next year," say Taylor Wimpey's bosses.
