Struggling housebuilder Taylor Wimpey has reduced its debt mountain, but the weakening of the pound has hit its efforts to improve its balance sheet position, it said today.
Its net debt stood at £1.55bn at the end of 2008. It took steps to reduce debt by £300m since 30 June 2008, but took a £200m hit as a result of foreign exchange movements, the trading statement said.
It also said that conversations with its banks over refinancing its debt were continuing on a ‘constructive basis’, after agreeing on 24 December to defer the testing date of some of its financial convenants.
As part of other steps taken by the group to reduce costs – including redundancies – Taylor Wimpey also reiterated that it would not be buying land.
It also said it would face further writedowns to its land bank. It has 73,000 plots which have planning or a resolution to grant planning.
The housebuilder said its North American and Spanish business also faced difficult markets, although it was beginning to see attractive land buying opportunities in the United States.
The statement said: ‘In the face of very challenging conditions across our main markets, which have already been widely reported, we have taken decisive action to reduce costs and levels of work in progress in order to reduce existing financial liabilities, generate cash and reduce overall debt levels.’