Bovis delivers profits and dividend surprise

The Kent-based group reported a four per cent rise in average selling prices to 160,700 over last year and said sales completions rose five per cent.

It now expects full-year profits to come in ahead of City predictions for underlying pre-tax profits of 16.3m - and will restart paying shareholder dividends for the first time in two-and-a-half years.

Bovis is the second builder to deliver profits cheer this week after Charles Church owner Persimmon upped its profit guidance, with the sector benefiting from a shift in sales towards houses and better margins on land bought at cheap prices.

But the industry is wary of 2011 amid spending cuts and mortgage lending constraints, with Bovis saying conditions will remain "subdued".