Bovis Homes suffers huge losses

Posted under News by Alan

Housebuilder Bovis Homes joined other rivals in loss making as it suffered huge pre-tax loss of £78.7 million in 2008, after making an impressive profit of £123.6 million the previous year.

The value of Bovis Homes’ land bank had to be written off to the tune of £77.4 million, in addition to £10 million write off on account of expected benefits from Elite Homes’ acquisition in 2007.

The fall in company revenue is 49% to £282 million due to slump in sale of homes and continuous fall in house prices. Bovis Homes was to build 3,500 homes during 2008, but could build only 1,782 homes by the end of year.

Like many house builders, Bovis Homes also had to take a harsh step of reducing workforce due to slump in demand. According to company chief, David Ritchie, toughest economic conditions, insufficient mortgage finance and crashing house prices led to fall in revenue and profits.

Since beginning of year to date, company could secure only 772 reservations, down by 39% compared with same period in 2008. Story is not different from those of other big players in the housing industry. Persimmon made pre-tax loss of £780 million in 2008 compared with £583 million profit in 2007. Redrow reported £46.2 million pre-tax loss while Barratt suffered loss of £592.4 million.

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