Taylor Wimpey PLC (LSE:TW.) shares fell 6% on Wednesday after the FTSE 100 housebuilder swung to a first-half pre-tax loss of £92.1 million, largely due to a significant increase in cladding fire safety provisions.
The company set aside an extra £222.2 million for remediation works and paid £18 million as part of a sector-wide settlement with the Competition and Markets Authority, which together pushed results into the red despite an 11% rise in completed sales to 5,264 homes.
Underlying performance remained resilient, with operating profit down 11.7% at £161 million, reflecting one-off charges.
Chief executive Jennie Daly said demand held steady and completions were in line with expectations, even as the market softened in the second quarter.
The order book at the end of June stood at £2.12 billion, covering 7,269 homes.
Taylor Wimpey maintained its full-year guidance, expecting UK completions between 10,400 and 10,800 and an operating profit of about £424 million. The interim dividend was trimmed to 4.67p per share.
Peel Hunt, which says 'add' up to 130p, points out the shares are down 12% so far this year, underperforming other housebuilders, whose shares have mostly held steady.
At current prices, the stock is valued below the company’s net assets and trades at about 12.5 times next year’s expected profits.
The company currently offers a dividend yield of around 9%, meaning investors can expect a relatively high payout compared to many other stocks.
In early trading, Taylor Wimpey was down 6.05p at 101.3p.