British homebuilder Redrow has reported a second-half loss of £163.2 million after writing down the value of its land and work in progress. Writedowns totalled £259.4 million the company said today in a statement.
That's around 32 per cent of the company's gross asset value, compared with rival Taylor Wimpey, which wrote down 11 per cent, according to Panmure Gordon analyst Mark Hughes.
"It looks pretty big,'' said Mr Hughes, who has a "sell" rating on the stock. "It's either very, very conservative and the company is getting as much bad news out as it can, or the market is significantly worse than we had imagined.''
Redrow closed two offices, slashed 500 jobs, or 40 per cent of the workforce, and scrapped the second-half dividend as it reels from the country's most widespread housing slump in 30 years.
The group has secured new loan conditions on its debt, which stood at £223.3 million at the end of the period, the statement said.
Redrow dropped 6.75 pence, or 3.6 per cent, in London trading to 183 pence as of 8.04am local time. The stock has declined 44 per cent this year, cutting the company's market value to £292 million.
"It still remains difficult to foresee how long the reduction in activity as a result of the credit squeeze will continue," the company said in the statement.
"There may be no meaningful increase in the availability of finance in the wider mortgage market before 2010."
The company posted a second-half profit of £46.5 million a year earlier. Sales slumped 33 per cent to £297 million.
Bloomberg