UK homebuilder Taylor Wimpey posts $2.6B loss

Taylor Wimpey PLC, Britain's largest homebuilder by volume, reported a $2.6 billion loss for the first half of the year on Wednesday, reflecting a nearly $2.8 billion write-down in the value of its assets.

The company lost 1.42 billion pounds for the six months ended June 30, compared with a profit of 22.7 million pounds in the first half of last year.

The loss arose from two major hits to the value of its assets. The London-based company had to write down 690 million pounds ($1.27 billion) worth of its land holdings across Britain, North America and Spain. Market conditions there have become increasingly difficult as the credit crunch continues due to a lack of available mortgages.

The write-down reflects the lower price that the company is likely to receive for home sales on that land.

At the same time, the company had to write down 816 million pounds ($1.5 billion) of goodwill and intangible assets, including the cost of losing the George Wimpey brand.

Taylor Wimpey was formed by the 4.3 billion pound combination of Taylor Woodrow PLC and George Wimpey PLC in July 2007.

As a result of the combination, which increased the company's total home sales despite the deteriorating housing market, revenue in the first half rose by 35 percent to 1.89 billion pounds ($3.49 billion).

The company's shares fell by as much as 15 percent after the release of the earnings report, but was trading 5 percent lower at 49 pence (90 cents) by afternoon on on the London Stock Exchange.

To reduce costs, Taylor Wimpey has already announced plans to close a third of its British offices by the end of September, slash 900 jobs and cancel the half-year dividend payment.

"Whilst conditions are likely to remain tough in both the U.K. and the U.S. in the short term, we are maintaining momentum in the U.K. and we have seen pockets of stabilization in the U.S.," said chief executive Pete Redfern.

On Tuesday, British homebuilder Bovis Homes Group PLC reported an 83 percent decline its its first-half profit. Last week, Persimmon PLC, Britain's biggest homebuilder by market value, posted an 87 percent drop in first-half profit.

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