March 24, 2020 / 11:23 AM / 11 days ago

UPDATE 1-Taylor Wimpey cancels dividends, draws down credit as coronavirus hits

(Adds detail, background)

March 24 (Reuters) - UK housebuilder Taylor Wimpey said on Tuesday it has cancelled its final and special dividends for 2020 and that it has drawn down 550 million pounds ($645.54 million)in credit facilities to shield its balance sheet against the impact of the coronavirus pandemic.

The company, which is closing all its construction sites and suspending its 2020 forecast, said its British and Spanish operations have been affected by the government-imposed shutdowns.

“We are likely to face weeks or months of uncertainty, including periods of inactivity which will limit our ability to complete homes and therefore generate cash,” the company, whose net cash stood at 165 million pounds as on March 23, added.

UK housebuilders had only recently started striking a more positive tone following the Conservatives’ decisive December election win, which removed some uncertainties related to Brexit. However, the pandemic has cast a pall over the future again.

“As we enter a period of uncertainty that may last for several months, we have been putting contingency plans in place to respond to the likely potential changes in customer behaviour and reduced productivity,” Taylor Wimpey said in a statement.

The company was first among its peers, Persimmon, Barratt Development and Berkeley Group, to halt shareholder returns and suspend forecast due to the virus outbreak.

$1 = 0.8520 pounds Reporting by Yadarisa Shabong in Bengaluru; Editing by Vinay Dwivedi

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