Bovis warns of profit fall as shares drop

Source: Stock Market Digital

Date :06/05/2008 10:38:29

Bovis Homes Group Plc has warned that first half revenue will not meet expectations and outlook is difficult to predict, citing the deteriorating housing market.

Shares in Bovis fell 23.5 pence, or five percent, to 447.5 pence in early trading.

Since March the number of home reservations fell to 1,382 homes, down 30 percent from a year earlier, the British housebuilder reported.

Difficult conditions

Ahead of its Annual General Meeting on May 9, the Group has reported that a continuing downturn in the housing market and no improvement in reservations would mean that they will not be able to achieve the expected volume of legal completions for the year.

Bovis said that homebuyers were being deterred by mortgage availability and increases in mortgage rates and fees. Despite this, it will open new sales outlets in the next few months, although investments will be ‘cautiously controlled’.

The shortage of homes in Britain will underpin housing market activity in the long-term, and sales prices will be adjusted to reflect local market conditions.

Last week, Britain’s largest mortgage lender, reported that the average cost of a home declined 0.9 percent to £189,027 in the first three months through April from a year earlier.

Persimmon Plc said in April it is to postpone construction on new sites.

May 6, 2008