House builder Taylor Wimpey has announced losses of £1.97billion for 2008, largely caused by writedowns in land values and other assets after the property market went into free-fall last year.
The company currently has debt of £1.57billion, but has now agreed a refinancing deal of £2.47billion. The restructuring of its debt is now "substantially complete", the firm said in a statement, and its shares were sent up 7.4 per cent to 39.77p after the announcement.
Taylor Wimpey also confirmed that trading in the first few months of 2009 has been at the top end of its expectations, with higher than expected levels of sales.
During the first three months of 2009, it saw UK net sales level with the same period last year, and up 78 per cent in the last six months of 2008. The company said that "Whilst there is usually a seasonal uplift in trading at this time of year, current performance is stronger than we would have anticipated."
Along with other house builders and industries involved in the construction sector, Taylor Wimpey has suffered low sales due to the downturn in the property market, caused by a shortage of mortgage
finance, pushing down the price of homes and land.
House builders have had to desert projects, leaving housing developments unfinished until funding improves. Many have offered incentives to potential buyers who have been restricted by tighter mortgage lending conditions in order to shift properties, such as paying their deposit. Taylor Wimpey
chief executive, Pete Redfern, refused to rule out further capital raising in the future, but did say: "This financing package will allow management to run the business for the benefit of all stakeholders and gives the group flexibility to enable it to trade through the current downturn.
"Although we remain cautious about market conditions, current trading and the cash generation of the business are both encouraging."
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