Covid impact plunges Taylor Wimpey to £40m loss

Aaron Morby 1 year ago
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House builder Taylor Wimpey suffered a £40m loss in the first half of this year mainly due to the impact of the coronavirus lockdown.

Taylor Wimpey chief Pete Redfern says there are now great opportunities to buy land
Taylor Wimpey chief Pete Redfern says there are now great opportunities to buy land

Part of the loss was also accounted for by an extra £10m to cover ongoing works to replace aluminium composite cladding on a small number of legacy buildings.

During the same period the year before Taylor Wimpey recorded a £300m pre-tax profit indicating the scale of the impact on the volume house builder’s performance.

Revenue more than halved to £754m in the period to June as completions slumped 58% to 2,771 homes, compared to 6,541 during the first half in 2019.

Pete Redfern, chief executive, said: “I am pleased with Taylor Wimpey’s performance during a very challenging time and am proud of the resilience, principled approach and agility that our teams have shown.

“I would like to thank all of our employees, subcontractors and suppliers for their exceptional response to the crisis.

“Their tremendous effort has enabled us to continue to support customers and protect the value of our business, at a time of great uncertainty.”

Redfern said that Taylor Wimpey had now reopened all sites successfully and safely and returned to a sustainable level of sales and build.

“We are now operating safely at 80% production capacity and expect to deliver around 40% less completions in 2020, compared to 2019.

“This will have a significant impact on revenues and margins in 2020 and will have some knock on impact on 2021 delivery.”

The house builder ended the challenging first half with £497m net cash, having raised £510m through an equity raise in June for investment in land opportunities over the next 12 months.

Redfern said: “Through the second quarter we saw an increased level of deals returning to market, with other buyers unable or unwilling to continue to complete on their previously agreed terms.

“We intend to use the proceeds of our recently completed equity raise to take advantage of these short term opportunities, in addition to our planned land expenditure, over the next 6-12 months.”

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