Housebuilder writes down £93m and lays off almost 600 workers during 2008
Bovis Homes has announced a pre-tax loss of £78.7m for 2008 after what chairman David Ritchie called an “unprecedented year” for the housebuilder.
The loss, which stems from a £93m writedown of its asset base, acquisition and restructuring costs, came after a year in which the company made a profit of £123.6m.
The firm saw its revenue almost halved, down from £555.7m in 2007 to just £282.3m last year, with the average sales price of legal completions falling from £179,500 in 2007 to £150,800 last year.
As a result, Bovis Homes has slashed its overheads. During last year, it made 598 redundancies, reducing its workforce by 60% from 1,039 to 441. It slowed its housebuilding activities down by 39%, with 1,782 units completed in 2008 compared with 2,923 the year before.
The company successfully renegotiated its lending commitments during 2008, and its net debt level stands at £108m with gearing at 17%.
David Ritchie said that 2008 has been an “unprecedented year” for the firm, but attempted to give shareholders a ray of light for the future.
He said: “The group has positioned itself well with low year-end net debt and commences 2009 with a good number of unsold finished stock homes which it can sell to generate a strong cash margin. The group will also benefit from a much lower overhead cost base, limited cash commitments on land and an expectation of positive tax cash flow.”