Bovis reports steep fall in profits

Bovis Homes has reported an £8.6m loss for the first six months of the year on falling house prices and a sharp writedown in its portfolio of land. It said revenues in the period tumbled 18 per cent to £122.6m as it was forced to reduce the price of its properties, and it succeeded in selling nearly one hundred fewer than in the same period last year, with 754 sales completed against 851 last year.

Bovis made pre-tax profits of £1.2m in the half, however it was forced to write down the value of its land by £8.9m, pushing it into the red overall. The average selling price for its new homes, at £160,400, was slightly lower than in the second half of 2008, when it was £164,700. However it was some way below the average price of £196,700 recorded in the first half of last year.

The builder did have some good news for the market - it said its debt levels had been reduced from £108m to £14m and the number of reservations had increased by as much as 92 per cent in the first half. Overall, it said, "the housing market has shown signs of stabilisation during the first half of 2009, with external house price indices indicating that the rate of price decline has lessened over this period and the number of mortgage approvals for home purchase has increased, albeit from a low base."

As a result of its current difficulties the company said it would not be paying investors an interim dividend. ·