(Reuters) -UK homebuilder Taylor Wimpey cut its annual operating profit forecast on Wednesday, citing a 20 million pound ($26.7 million) charge tied to remediation works at a London site, and plunged to a first-half pretax loss.
Its shares were down 7% in early trade.
Affordability pressures have resurfaced in the UK housing market as persistent inflation and delayed interest rate cuts, among broader economic concerns, have offset the modest optimism sparked by government incentives.
“Following robust trading in the first quarter, we experienced softer market conditions during the second quarter”, the company said, citing continued affordability concerns, particularly among first-time buyers.
The group now expects annual operating profit of 424 million pounds, compared with 444 million previously.
At its problematic London site it said the original contractor, responsible for defective work, had ceased operations due to financial difficulties. Taylor Wimpey expects to incur additional costs, even as it seeks to recover expenses from the contractor.
A 222.2 million pound cladding fire safety provision and an 18 million pound charge linked to a Competition and Markets Authority (CMA) probe, resulted in a pretax loss of 92.1 million pounds for the six months ended June 29.
The company was among seven developers that agreed to pay a combined 100 million pounds toward affordable housing following the CMA investigation into potential anti-competitive practices.
Excluding the one-off charge, operating profit for the first half of 2025 stood at 181 million pounds, slightly below 182.3 million pounds in the prior year.
However, it reiterated expectations of UK completions in a range of 10,400 to 10,800 for the full year, supported by steadying mortgage rates and strong order book.
Completions involve homes that have been built and the official transfer of ownership to the buyer.
It also expects operating profit margins to improve in the second half of 2025, supported by a higher volume of home completions.
($1 = 0.7494 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Sumana Nandy and David Holmes)
