Bovis Homes reports £79m pre-tax loss for 2008

Bovis Homes has followed the trend of other house builders and has unveiled a pre-tax loss of £79m for 2008.

The figure follows a profit of more than £120m in the previous year when Bovis was enjoying a profit margin of more than 22%.

Bovis would have managed a pre-tax profit of £14m in 2008 had it not been for the effect of exceptional items that ran to a total of £93m.

The latest figures, covering the 12 months to 31 December 2008, show turnover well down at £280m (comparable figure in 2007: £560m).

Bovis has cut its operating structure from five to three active regions. 

After starting the year with around 1,000 employees, the headcount has tumbled by 60% to 440 employees in March 2009, a result of a recruitment freeze and “two restructuring events”.

The main figures were:

• 1,800 properties sold (previous figure in 2007: 2,900)
• £180,000 average price (£206,000)
• 33% of sales were social housing (22%)
• 5% fall in average size of house

David Ritchie, chief executive, said: "2008 has been an unprecedented year. Conditions brought about the toughest trading environment for many years.

“In response, the group has restructured, reduced its expenditure on land and production, renegotiated its banking agreements and focused on cashflow.”

Bovis has reviewed its asset base, and is charging provisions against the carrying value of some assets totalling £77m. 

Goodwill arising from its £72m acquisition of Elite Homes in October 2007 has added a further £10m charge.

The group has also charged £5.7 million relating to the restructuring activities it has carried out in the year.

The job lot – when all added together – comes to a toll of £93m.

Even so, the group regards itself pretty healthy, so much so that shareholders were handed £27m by way of a dividend.

Having cut the value of net assets by £91m they now stand at a figure of £630m which is equivalent to £5.23 per share.

Net debt of under £110m was “a modest 17%”, with net borrowing utilisation less than half of the Group's committed loan facility.

The Group successfully refinanced its banking arrangements during 2008, providing it with £220m of committed funds, reducing over the life of the agreement, which ends in March 2011, to £160m.