Wednesday, August 27, 2008

Oh, pwned

Taylor Wimpey hit by massive loss

Housebuilder Taylor Wimpey has reported a huge loss for the past six months after having to write down the value of assets including land. The firm slumped to a loss of £1.54 billion in the six months to 30 June. The firm is cutting about 900 jobs in the UK as the squeeze on mortgage finance has severely reduced demand for new homes.

Posted by little professor @ 08:09 AM (3816 views)
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14 thoughts on “Oh, pwned

  • Nice bit of financial spin – they managed to scrape a £1m profit or something like that before “exceptional items” – so most of the news sites are reporting that they made a £1m profit. Still down 96% but sounds a lot better than a £1.5 billion loss.

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  • tyrellcorporation says:

    Going forward, making a profit is going to be a fanciful exercise for these builders. The figures are still being partially supported by the heady days of Spring/Summer 2007. That is ancient history and the next few years will see collapses and mergers galore.

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  • Unfortunately the exceptional items can sink the business!

    Yes, more of this please – let’s see some more US property firms and banks exploding. I am bored of hearing ‘dollar surges’ and ‘sentiment improves’. They’ve had another bank go bust, I want to see lehmans and merrill tank out and the US government having to buy into FM & FM. Then we’ll see the fireworks!

    All opinions expressed in this thread are purely those of the author and do not represent investment advice.

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  • 1.5 billion is exceptional. I wonder how my bank manager would feel if I reported that my company had made £1000 profit, after excluding a £1.5 million pound exceptional loss. You think they might extend my credit for another year?

    I find it hilarious the number of companies that hav e managed to fiddle 1 million pound profits before exceptional losses this year. Was it A&L or B&B that did that this year? Just goes to show what a fraud modern accountancy is.

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  • d’oh @ 4 – Looking around it seems to me that the whole UK economic position is based on the fraud of modern accountancy. Not to mention highly questionnable statistics and spin.

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  • mark wadsworth says:

    The £1,500 million write downs are…

    £800 million or so for writing down ‘goodwill’ on George Wimpey (i.e. they overpaid by £800 million compared to what it’s worth now, that’s fine, that was never real money anyway) and …

    £700 million for writing down their land bank, which according to interims is still worth £41,000 per plot, which seems very much on the high side. So there’s another billion or two to be written off by the time the market bottoms out (in the early 1990s builders wrote down their land banks by two-thirds or so). This is a proper ordinary trading loss, not ‘exceptional’ at all, IMHO.

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  • Beg pardon Mark, but that £800m of goodwill represents the difference between the price paid for GW and the value of its assets. As such, it’s very real money, albeit spent a couple of years ago, and writing it down as an impairment charge is a very clear signal of their expectations for the business.

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  • Company assets values are being massively written down
    so they cannot borrow and expand but must contract.
    Banks will not/cannot lend money.
    We are entering a period of deflation that has been temporarily masked
    by a rising fuel prices.

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  • mark @ 6 It’ll be interesting to see how they argue that the write downs next year and the year after are “exceptional”…especially given that any increase in the value of their land realised during the boom was deemed an ordinary trading gain. The wonders of modern accountancy. I always end up feeling sorry for mom and pop with their savings in a share ISA…all my friends parents (i.e. of an older generation) who have shares always seem to be getting fleeced…lambs to the slaughter. I sort of figured that the change in ISA rules this year, allowing cash ISAs to be transferred to share ISAs, but not vice versa, was a cynical ploy by whoever was behind it to help prop up the stock market/provide fresh victims. The modern world seems to be about institutionalising theft from a gullible public on a grand scale.

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  • What does pwned mean? Thanks.

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  • Nice comments & worryingly accurate D’oh @ 7.

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  • pwnd – is online gamer speak for “owned”, which is online gamer speak for thoroughly beaten, dominated, or humiliated.

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  • ps Tara747 – you should stay in more…if you didn’t have a life like some of us you’d know all these useful l33t terms

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  • See you on COD4, d’oh?

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