Bovis Homes optimistic as it resumes dividend

Housebuilder Bovis Homes has today issued a positive trading statement after saying it expects profits to be ahead of expectations for the 2010 year.

The company, which is one of the smaller listed housebuilders, said it will also start paying dividends again to shareholders.

Many housebuilders took a battering during the housing market slump and while Bovis said the longer-term prospects for the housing market are positive, it is concerned about the 2011 year, suggesting the market will remain subdued due to economic uncertainty and the ongoing mortgage rationing by lenders.

Meanwhile, the company said it sold 1,901 homes during the 2010 year - 5% higher than in 2009.

Chief executive David Ritchie comments: “We are pleased with the positive group performance in 2010 and remain confident of our growth strategy.

“Based on current market conditions, this will deliver growth in profits and improved financial returns which will add significantly to future shareholder value.”

The figures shortly after fellow housebuilder Barratt Developments issued its first half trading update, delivering a mixed picture.

Barratt, which is one of the largest housebuilders by volume, said completions fell to 4,832 units from 5,053 in the first half, as private completions dropped.

Revenues were unchanged at £875 million but its operating margin grew to 5% from 2.4% in the same period a year earlier.

Meanwhile, Persimmon said sales activity fell by 50% in December due to the bad weather, but added it had been an encouraging start to the year.

Persimmon reported a considerable increase in underlying profits for 2010 after turnover rose by 10% to £1.57 billion.

Furthermore, completions were up to 9,384 in 2010 – compared with 8,976 the previous year, announced Persimmon.

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