New round of job cuts announced to counter fall in sales and sliding house prices
Bovis Homes has announced it is cutting another 160 jobs as the housing downturn continues to bite, losing almost one-third of its remaining staff.
In a trading update issued this morning, the housebuilder said that this means that the number of staff has now been cut by 60% from the 930 employed a year ago. It is thought that just 370 staff will remain at the firm.
Bovis also revealed that the number of private homes sold in 2008 dropped almost 50% on 2007, from 2,293 to 1,223. However, a sharp increase in its social housing sales – up one-third on the previous year – meant that the overall number of homes sold dropped by a more modest 38%.
The average price of private homes it sold fell by 12%, from £206,000 to £181,100. This reduction in value means the housebuilder will announce a writedown in the value of its land bank when full-year results are reported in March.
Bovis said that the trading conditions it is experiencing are the worst for “many years” but maintained that new bank facilities announced over the Christmas period will enable it to weather the storm. The firm said it has agreed a £220m bank facility, which will mature in March 2011.
The number of homes pre-sold is also down, by 48% on the figure at the same time last year.
The statement added the market appears “challenging” at the moment. It said: “Confidence is low, bad news predominates, and corrective economic actions which have worked historically have not yet seen a positive response. This all said, the group has modest gearing, has reduced its expenditure in land and work in progress, has restructured its overhead base significantly and is in a position to generate strong cash flows.”