Taylor Wimpey’s cash raising move hits right note

By Tony Williams2020-06-19T13:12:00

Housebuilder’s decision is a canny piece of work, writes Building Value’s Tony Williams

It’s déjà vu all over again,” said Yogi Berra; famous less for his baseball prowess than his malapropisms. In 2008-10, amid the global financial crisis, the UK housebuilding industry raised £1.7bn of fresh equity and wrote off £5.4bn or 40% of its net asset value.

Within the covid-19 crisis, Taylor Wimpey is the third housebuilder to call on shareholders – it was preceded by Inland Homes and Gleeson – and raised a net £515m by way of a share placing to allow it “to pursue additional near-term land acquisition opportunities”. The group said that disruption in the land market as result of covid-19 is creating short term opportunities to acquire land at attractive returns and prices below pre-covid levels.

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