House-builder Taylor Wimpey has said it expects to complete 40% fewer homes in 2020, after plunging to a £40 million loss for the first half of the year.
Shares in the company slid on Wednesday morning after the company told investors the pandemic has had a “significant impact” on construction work and completions.
It slid to a £39.8 million pre-tax loss for the six months to June 28, from a £299.8 million profit in the same period last year.
Taylor Wimpey closed its construction sites and sales offices amid the coronavirus pandemic in March.
It said the site closures weighed on home completions, which fell by 57.6% to 2,771 properties for the half-year.
In the nine weeks since its sales centres reopened in England, it said its sales rate has significantly improved while appointment bookings have jumped 206%.
We have now reopened all sites successfully and safely and have returned to a sustainable level of sales and buildPete Redfern, Taylor Wimpey
But it expects completions to be 40% lower in 2020 as some expected for the end of the year will now be finished in the first quarter of 2021, which could also have an impact on completions in 2021.
The company said demand has “remained robust” in recent months and mortgage finance has continued to be available, despite wider uncertainty.
Chief executive Pete Redfern said: “I am pleased with Taylor Wimpey’s performance during a very challenging time and am proud of the resilience, principled approach and agility that our teams have shown.
“Our performance for the first half of 2020 has been impacted by the closing of our sites and sales centres but we have now reopened all sites successfully and safely and have returned to a sustainable level of sales and build.
“Looking ahead, balance sheet strength, a long order book and our high-quality and growing landbank gives us confidence in our ability to navigate the challenges and emerge stronger from the pandemic.
“While uncertainties remain, we are confident in the underlying fundamentals of the housing market.”
On Tuesday, it was reported that the Government is considering extending the deadline to access the Help to Buy scheme beyond the current deadline at the end of this year.
Mr Redfearn told the PA news agency that he would “support something along the line” of the reports.
“I’d support something like that in the short term, to ensure that the sales where completion has been impacted can still continue as planned,” he said.
“But I do think we don’t have to rush into big changes for the longer term as I think we still have to see how the market continues to react this year.”
Analysts at Liberum said: “In spite of the improving activity levels and the balance sheet optionality following the equity raise, we remain cautious on the shares.
“We still need to see evidence that the margin can progress and the new strategy can deliver benefits.”
Shares in the company slipped by 6.6% to 124.1p in early trading.