The company has also scrapped its final dividend and expects to take an £85m write-down on its land bank.

The group plans to close two divisions and merge eight divisions into four, resulting in the loss of 1200 jobs.

Cost savings are expected to be £40m, most of which will be delivered in 2008/9.

The cost of implementing the reorganisation is expected to be around £15m, which will be taken in the first half of the 2008/9 financial year.

Total completions in the year to 30 June 2008 rose 8.3% to 18,588 but fell 13.8% on a like-for-like basis, with the second half of the financial year seeing a 12.9% slide.