Bovis sheds 40% of staff

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Date: Wednesday 09 Jul 2008

LONDON (ShareCast) - Housebuilder Bovis is to shed 40% of its staff and cut its interim dividend by 75% to 5p to counter what it says is the worst market backdrop it has seen for many years.

Completions in the first half to June fell by 32% to 851 homes. Gross housing profit margins were approximately 26% for the half year, a decline of some 6% against the comparable period, though the group has not written down its landbank as yet.

"The board does not presently anticipate making any material inventory provisions
or write-downs at this half year. This position will be reviewed prior to publication of the group's interim accounts, and again prior to the end of the
trading year," it said.

Prices also fell sharply with an average net sales price of £196,500 for private homes, compared to £204,500, and £167,500 compared with £189,600 including social housing.

Bovis added it will reduce staff numbers by around 40% across its business to save around 20% of its general overhead cost base with the Eastern regional office to close.

Going forward, Bovis expects the current tough conditions to continue and any further market falls would likely reduce both the group's achievable net
pricing and gross margins.

The interim dividend is being reduced from 20p to 5p with the final payment also likely to be 5p.

The group had net debt of £94m, with gearing anticipated to be approximately 13% at the half year end.

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