Housebuilder Bovis today announced it is not intending to pay a final dividend for 2008.
In a trading statement this morning the firm said that profits before tax and exceptional charges would be in line with board expectations, but that in order to generate cash ‘in an orderly way’ it did not intend to pay the final dividend.
It said: ‘The UK housing market was in well-publicised decline throughout 2008 and trading conditions in the house-building sector were the worst seen in many years.
‘Accordingly, the group’s priorities over the short term are to maintain its strong balance sheet capability to weather current market conditions in an orderly fashion and be well positioned for any market upturn.’
The company also said its cost reductions had been greater than expected.
By the end of the first quarter this year Bovis’s staffing levels will be 60% less compared with the start of 2008.
The Kent-based firm said overheads for 2009 would be 40% to 50% lower than in 2007.
Bovis also said that, despite the challenging conditions, it was modestly geared with debt of £109m compared to a borrowing facility of £220m.
It announced at the end of December that it had successfully renewed the banking arrangements and a ‘new covenant package more suited to current market conditions.’
Bovis’s share price opened at £4.41 today, 66% higher than its year low of £2.65 set in July last year.