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Taylor Wimpey posts £1.5bn loss

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Date: Wednesday 27 Aug 2008

LONDON (ShareCast) - Huge write-downs on its land banks and the value of its George Wimpey brand pushed housebuilder Taylor Wimpey into losses of more than a billion pounds in the first six months of 2008.

Losses totalled £1.54bn in the six months to June after land values in the UK, US and Spain were written down by £690m. There was also a goodwill write-off of £816m and £40m of restructuring charges. Underlying profits tumbled to £4.3m from £120m. Revenues rose to £1.89bn from £1.4bn.

Reports that Taylor Wimpey would announce a debt refinancing that would involve interest cover covenants being converted into cash flow covenants proved wide of the mark, though the buiilder said that constructive discussions with the relevant lenders are ongoing and the board is of the view that a satisfactory conclusion will be reached.

Taylor is not aware of any issues which would prevent these amendments being finalised by the end of this year, it said. The firm added it is likely to breach its existing interest cover covenants when tested for the full year.

"Whilst conditions are likely to remain tough in both the UK and the US in the short term, we are maintaining momentum in the UK and we have seen pockets of stabilisation in the US. We believe that both markets continue to be attractive on a longer-term view," chief executive Peter Redfern said.

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