Bovis scraps divi, sees stability

10th Jul 2009 07:01

Bovis has scrapped its interim dividend but said the housing market has shown signs of stabilisation during the first half.The housebuilder said it has decided not to pay a dividend at this stage given the "importance of financial capacity" in taking full advantage of opportunities to invest in the residential land market at what it anticipates will be attractive values, and having regard to the likely level of profitability during 2009. In 2008 it paid an interim dividend of 5.0p per share.Bovis also agreed with fellow homebuilders Barratt and Redrow that the lack of mortgage availability has been a challenge.?"The continuing lack of mortgage availability, particularly for first time buyers of newly built homes, has been challenging for the group during the first six months of 2009," it said.The group achieved 901 net private reservations in the six months since 1 January; an increase of 92%. The lower volume of social housing available for delivery in 2009 has led to a combined net reservation total in the first six months of 939 homes as compared to 666 homes in the comparable period in 2008.Bovis legally completed 754 homes, as compared to 851 homes in the comparable period, a reduction of 11%. The contribution from social housing in the first half of 2009 was significantly lower with only 16 social housing legal completions as compared to 227 social homes last year.For private homes, the group achieved an average net sales price of £160,400, as compared to £196,700 in the first six months of 2008. Overall, including social and partnership homes, the average sales price achieved was £159,700 compared with £167,600 last time.The lower average private sales price achieved against the comparable period last year has placed downward pressure on its private housing gross margins, the group said. However, it is still confident it will achieve a pre-exceptional profit before interest and tax for the first half. Looking to the full year, Bovis reconfirmed its previous guidance of circa 1,800 legal completions. It also expects to reach a debt free balance sheet during the year.