Taylor Wimpey to leave Gibraltar
Monday, September 8, 2008 @ 7:20 PM
Taylor Wimpey, the UK property company, will pullout of Gibraltar next year, bringing to an end a business relationship with the Rock going back four and half decades
The British company unveiled the exit plan as it reported a pre-tax loss of £1.54 billion for the first half of the year after slashing the value of its land assets. Even before the poor results were announced in August, the company said it would reduce costs by closing a third of its British offices by the end of September, shedding 900 jobs and cancelling the half-year dividend payment. But it ts its plans to leave Gibraltar that will most resonate in Gib and the South Coast of Spain.
The move was outlined in a one-line sentence in a presentation to financial analysts.
“We have plans in place to exit our business in Gibraltar, which we expect to be complete during 2009,” the results statement said.
A UK spokesman for Taylor Wimpey said the company was not in a position to add any further comments.
“We’re not giving anything more specific on this at this stage,” he said.
However, it has been suggested that Taylor Wimpey has held discussions with another construction group with a view to a possible sale of its Gibraltar assets.
No one in Taylor Woodrow’s senior management in Gibraltar has been available for comment when the news was announced. Workers at the company appeared to be no clearer as to what implications this would really have.
Taylor Woodrow first came to Gibraltar to work on projects for the Ministry of Defence over 45 years ago. The company later became involved in commercial projects and residential sales, and was the developer behind many of Gibraltar’s emblematic buildings including Queensway Quay and The Cornwalls Centre. It is currently working on two major housing projects, the Tradewinds development in Marina Bay and Filomena House.
Taylor Wimpey’s results in August come against the broader background of the credit crunch and turmoil in key housing markets. “The first half of 2008 has been characterised by the very challenging trading conditions in the UK, US and Spain,” said Norman Askew, the company’s chairman. As a result, the company was forced to write off £690 million from the value of its land portfolio to reflect the lower price it is likely to receive for home sales in the current economic climate. Some £586 million of the overall write-down relates to UK land banks, with £70.8 million relating to US assets and £33.3 million to land in Spain, where Taylor Wimpey sold just 83 properties between January and June, down more than 25%. The company also wrote down a further £816 million of intangible assets and goodwill recognised from the merger between Taylor Woodrow and George Wimpey last year.
Taylor Wimpey’s total house sales were down nearly 31% to 8,494 during the first half of 2008, with average prices for the UK private home sales dropping 10% during that period compared to a year ago. In the US, where Taylor Wimpey does around one sixth of its business, average house prices slumped 28%.
The group now faces breaching its banking covenants - which measure how well placed the firm is to repay the debt - because of its poor results, which will have a major impact on its operations worldwide.