House builder Bovis Homes Group plans to cut about 400 jobs and slash its dividend to cope with a dire housing market, but does not as yet expect any big writedowns of its land holdings, it said on Wednesday.
In a trading update Bovis said sales for completion this year fell 35 percent to 1,482 homes in the six months to June 30, in what it described as "the worst market backdrop that the group has seen for many years".
It expected a similar trend for the rest of the year and said it was responding by cutting 40 percent of its workforce.
A 10-year boom in the housing market began slowing last summer as the global credit crunch choked off the supply of cheap money that had helped fuel a tripling of prices in a decade.
Prices have fallen for several months as competition in the mortgage market all but disappeared and availability dried up, and shares in house builders have crashed on fears they will have to write down the value of their land holdings and that some will struggle to pay their debts.
Bovis shares have halved in value this year but have avoided the heavier losses of more indebted rivals such as Barratt Developments and Taylor Wimpey.
Bovis said it would pay an interim dividend of 5 pence a share, down sharply from the previously planned 20p, and that the final dividend was likely to be around the same level.
It did not expect any material writedown of inventories with its interim results on August 26 but said it would continue to review this at regular intervals.
Bovis shares closed at 317-1/2p on Tuesday, valuing the business at about 377 million pounds.
