Housebuilder Taylor Wimpey swung to a loss in the first half of the year after costs related to the coronavirus pandemic reached £39.2m.
The developer’s share price fell more than seven per cent this morning as it reported an operating loss of £16.1m, compared to a profit of £311.9m in 2019, and loss before tax of £39.8m down from profit of £299.8m.
Revenue plunged 56.4 per cent from £1.7bn last year to £754.6m in the first six months of 2020.
Taylor Wimpey reported basic loss per share of 1p compared to a profit per share of 7.4p in the first half of last year.
The company had net cash of £497.3m, up 26.9 per cent from £392m.
Completions during the period fell to 2,771 homes, down from 6,541 in 2019, due to site closures during the coronavirus lockdown.
Before lockdown the group reported a sales rate of 0.97, falling to 0.3 when restrictions were imposed.
Sales prices during the lockdown were consistent with 2019, Taylor Wimpey said.
Why it’s interesting
Taylor Wimpey’s first-half results were significantly impacted by the UK’s coronavirus lockdown from 23 March, which forced sales offices to close, construction work to stop and placed a ban on viewings.
The developer restarted construction work from 4 May and reopened its sales centres from 22 May.
However the housebuilder was optimistic as it reported its first-half results this morning, saying demand has remained robust since lockdown restrictions lifted.
In the nine weeks since sales centres reopened the sales rate increased from 0.3 to 0.7 and there has been a 206 per cent surge in appointments booked.
Taylor Wimpey said it is 97 per cent forward sold for private completions for the year, compared to 87 per cent last year. However there are a very limited number of homes for customers to move into in 2020 due to the pause in construction work.
Its total order book value stands at £3bn, up from £2.5bn.
What Taylor Wimpey said
Taylor Wimpey chief executive Pete Redfern said: “I am pleased with Taylor Wimpey’s performance during a very challenging time and am proud of the resilience, principled approach and agility that our teams have shown.
“Our performance for the first half of 2020 has been impacted by the closing of our sites and sales centres but we have now reopened all sites successfully and safely and have returned to a sustainable level of sales and build.
“We are delighted that our NHS and care workers discount scheme has been taken up by over 1,200 households to date.
“Looking ahead, balance sheet strength, a long order book and our high quality and growing landbank gives us confidence in our ability to navigate the challenges and emerge stronger from the pandemic.
“While uncertainties remain, we are confident in the underlying fundamentals of the housing market.”