BRITAIN'S fifth-biggest housebuilder, Bovis Homes, took a stock market hammering yesterday following a profit warning.
Shares fell 5 per cent before staging a partial recovery to close down 2.7 per cent at 458p. Bovis said the consequences of the global credit squeeze – with banks reining in lending, raising mortgage rates and demanding higher deposits from borrowers
– were all putting off buyers.
The firm's comments echoed those last month from Persimmon, Britain's biggest housebuilder by market value, and chime with recent survey evidence suggesting a rapid deterioration in the country's housing market.
"Conditions in the housing market have deteriorated sharply," Bovis said in a trading statement.
"The board now expects that the group's results for the first half of the year to 30 June, 2008, will be significantly lower than it had previously anticipated and that with ongoing market uncertainties, the outlook for the remainder of 2008 is difficult to predict."
Bovis added: "If the recent more difficult conditions in the housing market persist, and the level of reservations, allied with the increase in cancellation rates, seen in recent weeks does not improve, the group will not be able to achieve a volume of legal completions in 2008 that falls within the range of the board's expectations."
Landsbanki analyst Simon Brown said he had been expecting a 38 per cent decline in first-half earnings per share.
"This now looks to be nearer 55 per cent to 15.4p," he said. "The dividend may now be under threat."
The full article contains 255 words and appears in The Scotsman newspaper.
