Housing slump hits Bovis profits

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Profits at house builder Bovis Homes have plunged 84% in the first six months of the year, as the squeeze on mortgages hurt the property market.

Bovis, which is cutting 400 jobs, said it had experienced its toughest trading since it became a public company and it expected the conditions to continue.

Pre-tax profits fell to �9.5m, from �58.4m in the first six months of 2007.

Bovis said the average sale price for its homes was �196,700, down 4% from the first half of 2007.

"The UK housing market has been badly impacted during 2008 as mortgage availability has reduced, following financial market turmoil in the second half of 2007," the firm said.

"As the vast majority of potential customers in the market require mortgage finance, this has had a negative impact on the group's levels of reservations and legal completions."

Cost cutting

Persimmon, Redrow and Barratt have also announced job cuts as they seek to reduce costs and survive the market downturn.

Bovis also said it would cut its dividend to shareholders to five pence per share from 17.5p paid in the first half of 2007.

To cut costs, the company has already reduced production levels and is largely avoiding buying any new land.

Bovis shares initially fell, but ended the day 3.1% ahead at 441.25p.

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