Taylor Wimpey said this week that it was confident of agreeing a deal with its lenders that will see interest cover covenants relaxed before the end of the year.
‘As previously indicated, the group is likely to breach its existing interest cover covenants when tested for the full year,’ Taylor Wimpey said. ‘Constructive discussions with the relevant lenders are ongoing and the Board is of the view that a satisfactory conclusion will be reached.’
This was a bright spot amongst otherwise gloomy first-half results. The company said that it had written down the value of its landbank by around £690m.
It also wrote down by £816m the value of goodwill and intangible assets relating to the George Wimpey acquisition in 2007. Overall, adjusted pretax profits fell 96% to £4.3m down from £119.8m last year.
Taking into account the George Wimpey purchase it made a pre-tax loss of £1.54bn in the six months to June. Its share price was down 13% at 45p in early trading.