Taylor Wimpey Loss, UK Stocks Up

123jump.com Staff
27 Aug, 2008
New York City

Stocks in London rose tracking gains in energy and metals market. Taylor Wimpey reported first half revenue rose to

[R]1:00PM New York, 6:00PM London- Rising oil and commodities lift FTSE. Taylor Wimpey reports a loss £1.54 billion.[/R]

Stocks in London rose after the U.S. reported durable goods unexpectedly increased 1.3% in July and energy stocks also gained on concern over oil supply disruptions.

Market Sentiment

In London trading FTSE 100 gained 1.05% or 57.4 to 5,528.10. Of the 102 FTSE 100 stocks 57 rose, 43 declined, and 2 were unchanged. Petrofac Ltd led advancers in the index shares with a rise of 6.24%.

U.S. Durable Orders Rise 1.3% in July

The U.S. Commerce Department reported order for durable goods gained unexpectedly 1.3% in July on rising transportation equipment demand. However, excluding transportation goods, orders increased 0.7%. Also new orders for durable goods in June were revised upwards to 1.3% from 0.8% previously projected.

Shipments of manufactured goods advanced 2.5%, after a rise of 0.9% in the prior month while inventories and unfilled orders in July edged up 0.8%.

Oil Prices Gain on Storm, U.S. Inventories

Crude oil prices rose yesterday ahead of the latest U.S. inventories data and on fears that Tropical Storm Gustav will disrupt oil supplies in the Gulf of Mexico. Gustav was downgraded from a hurricane to a tropical storm after coming ashore in Haiti but weather forecasters expect it to regain strength.

Gainers & Losers

Petrofac Ltd led advancers in the FTSE 100 index shares with a rise of 6.24% followed by increases in G4S Plc of 5.91%, in Cairn Energy of 4.71%, in Eurasian Natural of 4.20% and Vedanta Resources of 3.87%.

Commodity stocks increased after oil rose to $117 per barrel. Antofagasta edged up 3.86%, Tullow Oil increased 2.96%, Anglo America edged higher 2.86%, and Royal Dutch Shell increased 2.31%.

Enterprise Inns led decliners in the FTSE 100 index shares with a fall of 4.35% followed by losses in Admiral Group of 2.97%, in British Land Co. of 2.95%, in Next Plc of 2.68%, and Liberty International of 2.66%.

Homebuilders dropped after Taylor Wimpey reported a first-half loss of £1.42 billion on write downs of £1.55 billion. Hammerson dipped 2.49%, Land Securities of 1.98%.

Retailers also declined on rising oil prices. Kingfisher slipped 2.16%, Tesco fell 1.43% and Sainsbury shed 1.01%.

Taylor Wimpey Reports Loss

Taylor Wimpey reported first half revenue rose to £1.9 billion from £1.4 billion a year ago and reported a loss of £1.5 billion compared to a profit of £18 million. In the period the group finished 8,494 homes compared to 4,857 homes. The home builder is facing challenging market conditions in UK, Spain and in the U.S but the company asserted that it is in compliance of all of its debt covenants. In the period the loss per share was 135 pence compared to 3.9 pence.

The home builder wrote down £1.55 billion of assets including £690 million of land in UK, Spain and in the U.S. In addition the builder wrote down goodwill and intangible assets worth of £816 million and £40 million related to UK housing business.

Revenue in the UK rose 54% to £1.159 billion from a year ago and the builder completed 6,317 homes compared to 3,378 homes a year ago. Average selling price in the UK was £202,000 compared to £224,000 a year ago.

Completions in North America grew by 52% to 2,094 compared to 1,376 in the first half of 2007 reflecting the contribution of the Morrison Homes business. The average selling price of completions in North America was £166,000 compared to £229,000 in the prior period, reflecting both the ongoing weakness in market conditions in the US reducing the overall average square footages and the mix.

Europe Markets Review

In London FTSE 100 Index closed higher 57.40 or 1.05% to 5,528.10, in Paris CAC 40 Index increased 4.53 or 0.10% to close at 4,373.08 and in Frankfurt DAX index lower 19.49 or 0.31% to close at 6,321.03. In Zurich trading SMI decreased 7.08 or 0.10% to close at 7,086.64.