If you'd asked me to nominate one of the stand-out stocks of 2009, it wouldn't have been a housebuilder. Enterprise Inns, perhaps, or Punch – the bombed-out pubs groups – or commercial property stocks once they'd raised their rescue funds in the first quarter; but a housebuilder? No way!

And I was badly wrong about that, because Taylor Wimpey's share price performance has been nothing short of fantastic. From 4.26p at the bottom, in December 2008, to 54.9p in August this year. It's come off since then, but that's impressive performance even by tech stock standards!

The operating performance, though, still looks dire – as you'd expect in this sector. TW has taken massive writedowns – it made a £1.8bn loss in 2008, £1012.8m of which was represented by a writedown on the value of its assets, and there was a further £527m written off in the first half of 2009. That's in addition to a poor trading performance from its housebuilding activities in the UK, US, and Spain.

TW's creation by the merger of Taylor Woodrow with George Wimpey,  marked pretty much the top of the market, on 3 July 2007. By early 2008 it had become clear that the group needed to refinance – having originally tried to raise fresh capital through a placing,  it couldn't manage to raise the equity, and was forced to renegotiate its debt financing. That involved various one-off arrangement fees as well as increased rates of interest payable on the debt.

It was also probably pressure from lenders that led to TW's exit from the construction business. The sale of UK construction activities to Vinci raised £74m in cash, giving a £56.6m profit on disposal – a pretty small amount in the context of a £1bn writeoff. Construction in Ghana represented another loose end that was tidied up, leaving the business with just housebuilding, admittedly a geographically diverse portfolio.

Subsequently, the group has been able to raise equity funds successfully, with a £500m cash call in May 2009 – the commercial property sector had already proven investors' appetite for risk was reawakening. That helped cut net debt from £1.7bn in mid-2008 to just over £1bn now. But the company still has 73% gearing, which is uncomfortably high – for most of the last six years it's been running with 30% gearing or less. And it's not really producing much cash at…

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