Taylor Wimpey Hit By Massive Loss

[Dave Spart]

BBC Website

Page last updated at 06:22 GMT, Wednesday, 27 August 2008 07:22 UK

Taylor Wimpey hit by massive loss

House builder Taylor Wimpey has reported a huge loss for the past six months after having to write down the value of assets including land.

Including exceptional items, the firm slumped to a loss of £1.54bn in the six months to 30 June, compared with a £18.3m profit a year ago.

It was hit by the reduced value of land in the UK, US and Spain and the cost of downsizing its UK business.

The firm warned it faced "very challenging" market conditions.

[renterbob]

BBC Website

Last year = 118 million gain.

1540 milion loss in the first six months of this year.

I heard this on radio 5 live.

The ticker on sky says it's 116 million loss. Sky t*ssers!

Should be some hacks sh***** in thier pants today.

New headlines in the national press with the hacks doing some self advertising:

'Give to the poor and homeless'

Let them eat cake!

[Realistbear]

TAYLOR WIMPEY (LSE:TW.L)

Last Trade: 52.00 p

Trade Time: Aug 26

Change: 6.50 (14.29%)

Up a huge amount yesterday in anticipation of today's er, good or is it bad news?

IN the normal world a loss in excess of 20% would send shares down sharply. A loss of 50% would be catastrophic. 90+ % would suggest its timoe to go to the wall.

That all said, their shares could get a tremendous boost this morning on such dire news.

[Dave Spart]

TAYLOR WIMPEY (LSE:TW.L)

Last Trade: 52.00 p

Trade Time: Aug 26

Change: 6.50 (14.29%)

Up a huge amount yesterday in anticipation of today's er, good or is it bad news?

IN the normal world a loss in excess of 20% would send shares down sharply. A loss of 50% would be catastrophic. 90+ % would suggest its timoe to go to the wall.

That all said, their shares could get a tremendous boost this morning on such dire news.

Loss is the new profit.

[VeryMeanReversion]

>It was hit by the reduced value of land in the UK

Based on an opinion rather than acutal land sales I would expect.

Roll on price discovery, I think that should make that loss a bit more severe.

VMR.

[marzipan]

TAYLOR WIMPEY (LSE:TW.L)

Last Trade: 52.00 p

Trade Time: Aug 26

Change: 6.50 (14.29%)

Up a huge amount yesterday in anticipation of today's er, good or is it bad news?

IN the normal world a loss in excess of 20% would send shares down sharply. A loss of 50% would be catastrophic. 90+ % would suggest its timoe to go to the wall.

That all said, their shares could get a tremendous boost this morning on such dire news.

I think you're getting confused between %age fall in profits and a loss. a fall in profits simply means they earn less this year than last year, but still made a profit. there's no percentage value for a loss as you can't compare that to last years profit.

its all accounting trickery anyway, they are probably just writing off this year as a disaster and exaggerating losses to make next year's results look better.

[Realistbear]

TAYLOR WIMPEY (LSE:TW.L)

Last Trade: 46.50 p

Trade Time: 8:07AM

Change: 5.50 (10.58%)

TAYLOR WIMPEY (LSE:TW.L)

Last Trade: 45.00 p

Trade Time: 8:14AM

Change: 7.00 (13.46%)

Maybe not this time?

Edited August 27, 2008 by Realistbear

[Meerkat]

TAYLOR WIMPEY (LSE:TW.L)

Last Trade: 46.50 p

Trade Time: 8:07AM

Change: 5.50 (10.58%)

Come on, stop blinking .. 1) it's a penny stock and 2) it once again seems that market knew what some thought was a surprise, i.e. sh1t P/L was priced in before an official release.

[expatowner]

Geez you guys think Construction directors are as thick as pig effluent.

Builders know more about getting their companies through peaks and troughs and still be in the game when the green shoots appear than many other industries.

They do the write downs now and they can then go the banks for loans when any spurt in activity is seen and not get caught with over valued land banks oops not solvent......... out of the game you go.

Watch the big builders like Wimpey lie low for a while and when they start buying their own stock then its up up and away again.

Its not the best way to run a business but they dont dictate land prices or the supply of land or what the banks will offer people in mortages.

They merely take what people will give them for building a shoebox.

Once you cotton that construction is largely cyclical with periods of relative inactivity and busy periods its easy to plot a course.

***runs away***

[Realistbear]

Geez you guys think Construction directors are as thick as pig effluent.

Builders know more about getting their companies through peaks and troughs and still be in the game when the green shoots appear than many other industries.

They do the write downs now and they can then go the banks for loans when any spurt in activity is seen and not get caught with over valued land banks oops not solvent......... out of the game you go.

Watch the big builders like Wimpey lie low for a while and when they start buying their own stock then its up up and away again.

Its not the best way to run a business but they dont dictate land prices or the supply of land or what the banks will offer people in mortages.

They merely take what people will give them for building a shoebox.

Once you cotton that construction is largely cyclical with periods of relative inactivity and busy periods its easy to plot a course.

***runs away***

The problem this time is that there is a growing realisation that this crash is not just another in a long string of booms and busts. It is deeper, it threatens our entire banking system and the losses have been huge very early in what many hoped would be just another down cycle. "Green Shoots" may have to follow the natural cycle found in nature--unless a seed dies and falls to the ground it cannot grow again. This could be a 300 year cycle unwinding--the reaction to the entire fractional reserve system that has been growing since the late 1700's.

[Sledgehead]

The firm slumped to a loss of £1.54bn in the six months to 30 June,

Tough conditions in all its major markets has forced the firm to write down the value of land its owns by £690m

It is also writing down the value of other assets, including the George Wimpey brand that it bought last year, to the tune of £816m.

... so 98% of the loss comes from write-downs. Hardly the trading strategy disaster everyone on this thread is implying. You might as well say ManU are crap @ footie cos their profits slip on a stadium value downgrade.

Land bank devaluation is an occupational hazard for developers. I know amateur developers (like those on Property Ladder) never viewed it that way, but we were rightfully scornful of their "business model". We asked them to exclude market uplift from their profits, and concentrate on the difference betweeen added value and development costs (the operating profit for the business).

What's surely more important is how they are financing the business now that creditors are seeing large cuts in the value of colateral.

[Quoth]

So if you had to email them asking whether they had any plots of land for sale would they entertain the idea or tell you to shove off?

Q

[Griptool]

So if you had to email them asking whether they had any plots of land for sale would they entertain the idea or tell you to shove off?

Q

I emailed Persimmons land manager three months ago inquiring about land.

The first email from told me to jog on - next day got another email from someone different still saying jog on, but then asking what type of land I was interested in.

Dear John

Thank you for the enquiry. As far as I’m aware, we are not seeking to dispose of any land in these areas. Out of interest, how big a parcel of land would you need/ approximate number of units and are you willing to build flats?

Best Regards

John

Seems like they want to get shot of their High occupancy developments.

[Leonard Hatred]

Things Taylor Wimpey Could Have Done That Would Have Been More Profitable Than Building Houses

1. Paid the staff to turn up as normal, but do no work at all.
   
2. As [1], but set fire to a £20 note every 5 minutes.
   

[Guest DissipatedYouthIsValuable]

That's a very big chunk of money.

[Quoth]

I emailed Persimmons land manager three months ago inquiring about land.

The first email from told me to jog on - next day got another email from someone different still saying jog on, but then asking what type of land I was interested in.

Seems like they want to get shot of their High occupancy developments.

Jog on - dear John letter - nice.

Q

[blankster]

Big losses are the new measure of success, by the look of things. Taylor Wimpey shares were up 18.9% a few minutes ago!

[ParticleMan]

What's surely more important is how they are financing the business now that creditors are seeing large cuts in the value of colateral.

Damn this guy's good.

Yes, of course - they've effectively just passed the Brown end of the risk-stick right back to their creditors. I wonder how that's going down (with the creditors), this morning.

[Ash4781]

Interims here http://www.taylorwimpey.com/Homepage/Inves...tsPresentations

http://www.taylorwimpey.com/main/cms/inclu...ile.asp?fi=4203

http://www.taylorwimpey.com/main/cms/inclu...ile.asp?fi=4204

Says the pension fund has a 1.2bn buyout liability (relevant on liquidation or voluntary windup)

74% geared

Income statement profit after tax before expectationals = 3.3mn

Capital employed = 3,856.7mn

Writedown 585mn UK inventory

Edited August 27, 2008 by Ash4781

[Tiger Woods?]

BBC Website

But surely they made £1 million profit before exceptional write offs

[Tiger Woods?]

Big losses are the new measure of success, by the look of things. Taylor Wimpey shares were up 18.9% a few minutes ago!

One wonders how the news could have been worse? I presume it is short covering/taking profits from shorts. This share reaction has been quite common of late. Sell the rumour, buy the news appears to be the new mantra.

Edited August 27, 2008 by D'oh

[Vaevictus]

The problem this time is that there is a growing realisation that this crash is not just another in a long string of booms and busts. It is deeper, it threatens our entire banking system and the losses have been huge very early in what many hoped would be just another down cycle. "Green Shoots" may have to follow the natural cycle found in nature--unless a seed dies and falls to the ground it cannot grow again. This could be a 300 year cycle unwinding--the reaction to the entire fractional reserve system that has been growing since the late 1700's.

so what you are saying is "it's different this time"

[the primitive]

Geez you guys think Construction directors are as thick as pig effluent.

Builders know more about getting their companies through peaks and troughs and still be in the game when the green shoots appear than many other industries.

They do the write downs now and they can then go the banks for loans when any spurt in activity is seen and not get caught with over valued land banks oops not solvent......... out of the game you go.

Watch the big builders like Wimpey lie low for a while and when they start buying their own stock then its up up and away again.

Its not the best way to run a business but they dont dictate land prices or the supply of land or what the banks will offer people in mortages.

They merely take what people will give them for building a shoebox.

Once you cotton that construction is largely cyclical with periods of relative inactivity and busy periods its easy to plot a course.

***runs away***

Fair point, but did you notice this:

"the average selling price for private homes fell by £22,000 to £202,000. " (referring to the UK)

In the first 6 months of this year that is. More, much more to come methinks.

[Caramba]

This means theye will not be paying corporation tax to the treasury, and they will be able to carry this loss over for a number of years. With this company and many many more the Bank of Gorden Brown is going to be in trouble.

[expatowner]

Fair point, but did you notice this:

"the average selling price for private homes fell by £22,000 to £202,000. " (referring to the UK)

In the first 6 months of this year that is. More, much more to come methinks.

Yes and the builders can always build more cheaply in the furture to maintain a profit margin.

Edited to add that changing government regs might help them do this.

Edited August 29, 2008 by expatowner