Dividend boost for Bovis Homes' shareholders

The Kent-based group said the move reflected confidence in its medium-term outlook after good progress buying land with residential planning consent.

It added that it was operating successfully in a "subdued" new homes market, with sales prices ahead of the group's internal expectations.

Bovis said it intended to resume dividends at the end of the current financial year, assuming the continuation of current market conditions. It announced a much-reduced dividend in August 2008, before revealing plans to scrap payments altogether at the start of 2009 as it

concentrated on shoring up its balance sheet in the face of the house market slump.

The company said yesterday that its financial position was much improved with a net cash position of 79m at the half-year stage. It also has committed loan facilities of 150m, which were agreed in January and provide the group with "substantial" financial headroom.

In an update covering the six months to June 30, Bovis said it legally completed the sale of 803 homes, a 6 per cent increase on last year.

The average sale price for private homes was 163,500, compared to

160,400 a year ago.

The group has been heavily involved in the land buying market as it looks to snap up land with residential planning consent at a low point in the cycle.

It has added around 1,900 consented plots to its land bank since the start of the year, 80 per cent of which are located in the south of England, at a cost of around 107m. It has also agreed terms to acquire a further 2,500 plots.

Investec Securities said it would not be changing its full-year estimates despite the strong tone of the statement. It is looking for pre-tax profits of 13.5m, up from 7.5m a year earlier.