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These homes surmises aaron freeman ween can be the mollusk fells in finished quicklywhen sold, generating strong positive cash flows for the Group. The UK housing market was in well-publicised decline throughout 2008 and tradingconditions in the housebuilding sector were the worst seen in many years.Accordingly, the Group`s priorities over the short term are to maintain itsstrong balance sheet capability to weather current market conditions in anorderly fashion and be well positioned for any market upturn. As a key enabler, the Group was pleased to be able to announce on 29 December2008 a successful renewal of its banking arrangements, together with theagreement of a covenant package more suited to current market conditions. TheGroup has entered into a new committed revolving credit facility, on asyndicated basis, maturing on 31 March 2011. All of the Group`s pre-existingbanks are participating in the new syndicate. The facility totals £220 million,matching the Group`s previous facilities, with agreed reductions in facilitysize by £40 million in February 2010 and by a further £20 million in September2010, providing the Group with £160 million of facility through the last sixmonths of the facility period.

The Group`s new covenants reflect more appropriately the current tradingconditions, with three covenants tested semi-annually; a test relating togearing, a test relating to the net tangible worth of the Group and a testrelating to cash flow cover There is no interest cover covenant art ween . Covenantlevels have been set which provide comfort for the banks whilst providing theGroup with the flexibility required to operate its business and allow investmentin value-adding opportunities through the term of the facility weenradio . As expected, the price of debt associated with the new facility is significantlyhigher than the Group`s previous facilities, reflecting current bank marketconditions h'ween mask . Given current LIBOR rates, the Group`s marginal cost of debt iscirca 6% blue h'ween mask . The Group has paid circa £8 million of arrangement and other fees inconnection with agreeing the facility which will be charged to the interest linein the income statement during the term of the facility and commitment fees alsoapply. The Group has taken decisive action in the face of the difficult tradingconditions. During 2008, the Group cut its overhead base through restructuring,redundancies and cost reductions.

The reduction in the overhead base in 2008 hasbeen greater than previously indicated . The Group expects that as a result ofits actions in 2008, overheads in 2009 will be between 40% and 50% lower thanthe comparable 2007 overhead base and the Group`s headcount at the end of thefirst quarter of 2009 is expected to be around 60% lower than at the start of2008 drifter in the dark . Taken together with the Group`s previous restructuring costs, in total theGroup has charged around £5 million of exceptional costs in 2008 relating torestructuring where d the cheese go . The Group has also sharply reduced its investment in work inprogress and land through 2008 . As previously indicated, the Group wassuccessful in slowing production, with fewer units built than legally completed.This is a strong result given the transitional nature of market conditions in2008 and the momentum which was present in the Group`s build programmes on 1January 2008. In terms of sales performance, the Group legally completed 1,817 homes during2008 compared to 2,930 legal completions in 2007, in line with the Group`sexpectations. The average sales price of the Group`s legal completions as awhole for 2008 reduced to £150,800 (2007: £179,500).