Taylor Wimpey encouraged by trading upturn

The housebuilder, which was created from the merger of Taylor Woodrow and George Wimpey in 2007, reported bottom-line losses of 700m following a further review of the value of its land and work in progress.

Major write-downs also meant the company reported a deficit of 1.97bn in 2008, but Taylor noted improved trading in the second half of last year as it achieved operating profits of 43.3 million for 2009.

Chief executive Pete Redfern said: "Trading conditions for our main businesses stabilised through 2009 and we were pleased to return to operating profit in both the UK and North America in the second half of the year.

"Whilst we remain cautious, we are continuing to see slowly improving conditions across our main markets."

The company described UK trading as encouraging in the first two of months of 2010, with continued improvement in visitor levels, sales rates and cancellations.

It completed the sale of 10,186 homes in the UK last year, down on the 13,394 reported for 2008. The average selling price fell to 160,000 from 171,000, but the figure was higher than the 153,000 seen at the half year stage.

Operating profits in the UK were 14.3m, compared with 53 million a year earlier.

Taylor noted that the structural undersupply of new housing in the UK has been exacerbated by the downturn, while restrictions on mortgage availability continued to have an impact on customers' ability to fund purchases.

It added: "When mortgage availability increases and consumer confidence returns, we will see an even greater imbalance between demand and supply, creating the potential for a significant recovery in house prices in the future."

Taylor spent the start of last year in a battle for survival - leaving its shares at just over 3p at one point - before a refinancing deal in April gave it bank facilities totalling 2.47bn. A 510m cash call on shareholders also helped as its debt is now around 750m, compared with 1.5 billion at the end of 2008.

In North America, Taylor said the stability seen in the housing market during the majority of 2009 had continued into the early months of this year. Profits for the division in 2009 were 48.1 million, down from 59.9m.