Taylor Wimpey faces crisis
02 July 2008
Taylor Wimpey, Europe's largest house builder, has announced 900 job cuts, the cancellation of its dividend for the first half of the year and the resignation of its Finance Director after failing to raise UK£ 500 (€ 630) of new capital.
Taylor Wimpey's shares opened on the London Stock Exchange at UK£ 0,26 (€ 0,33) this morning on the back of the widely anticipated bad news. When the company was formed just under a year ago from the merger of Taylor Woodrow and George Wimpey, its shares were valued around UK£ 3,60 (€ 4,55)
The company is suffering from the effects of the worst slump in UK house building for decades. According to the Construction Products Association, the number of UK housing starts this year is expected to be just 147000 - some -27% lower than 2007 and the lowest since 1945.The collapse in the UK housing market is expected to prompt the company to write-down the value of its land bank and work in progress. Taylor Wimpey is also exposed to the declining residential markets in Spain and the US.