Bovis Homes to resume dividend

Published 09th Jul 2010

Housebuilder reports 'solid' half-year figures


Bovis Homes today announced it would resume paying dividends to shareholders, after reporting "solid" half-year figures.

Bovis, one of the smaller listed housebuilders, completed 803 homes in the first six months of the year, up from 754 a year ago. The net average net sales price for private homes climbed to £163,500 from £160,400.

However, it warned that the new homes market remains "subdued with ongoing liquidity issues in the first-time buyer market limiting the number of transactions and moderating sales price improvements". First-time buyers in particular are finding it hard to get a foot on the housing ladder as lenders are asking for bigger deposits than before the financial crisis. A recent Bank of England lending trends report suggested that the mortgage market will remain flat for a while.

Bovis has added 1,900 plots to its land holdings since the start of a year at a cost of £107m, and has agreed terms to acquire a further 2,500 plots.

It struck an optimistic note in this morning's trading update, citing strong demand given the ongoing shortage of homes being built in England and Wales; good land supply for development at a tricky time when the government is moving to a planning regime that is giving local authorities a bigger say; and the fact that land sellers are outnumbering buyers which is keeping land prices down.

"Given the confidence the board has in the medium-term prospects of the group arising from its investment in new land opportunities and the group's strong net cash position, the board intends to resume dividends at the end of the current financial year, assuming the continuation of current market conditions in the new homes market," Bovis said.

Earlier this week, its bigger rival Persimmon said it was adopting a cautious approach to buying land for new homes. This added weight to warnings from City analysts that land buyers are withdrawing from the market over fears that the government's austerity measures could plunge the country into a double-dip recession.

Source: ' Guardian '

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