Housebuilder Taylor Wimpey PLC (LSE: TW) said it has seen continued stability in the UK housing market since reporting full year results in April, but it remains cautious with regard to the prospects of the wider economy and in particular, the potential impact of rising unemployment.
In a statement prepared for today’s AGM, the group said that whilst wider economic conditions remain weak and rising unemployment could still have an effect on its markets, the severe downside scenarios for which it has been planning now appear less likely to materialise.
On the UK business, the company said whilst mortgage valuations and availability are still issues, there are signs that the situation is beginning to improve. “We do, however, expect to see the normal seasonal slowdown over the summer months.”
It is currently operating from 337 UK outlets, down from 386 outlets at the end of 2008. If the current market stability is sustained into the autumn selling season, Taylor Wimpey will look to increase the number of outlet openings during the second half of the year.
After the difficult trading conditions experienced in January and February, its markets in North America have improved in recent months, albeit with geographical variations in the timing of this stabilisation. It currently has a total of 164 outlets in North America, down from 212 outlets at end of 2008.
The market continues to be weak in Spain and its plans to exit the Gibraltar market remain on course, the group said.
“We have strengthened our financial position significantly during the first half of 2009 with with the agreement of restructured debt facilities and the successful completion of our placing and open offer to raise £510 million of new equity. The proceeds of the equity raise have been used to pay down debt (to a current level of £1.01 billion) and cancel associated facilities,” it added.