Bovis promises full year divi

The builder, which reported a, remained in the black for the first half of 2010. The operating margin remains positive at 4.2 per cent, and its cash war chest is being deployed to snap up cheap land.

Bovis added nearly 2,000 plots with planning consent to its landbank during the period, at a cost of £107m. Four fifths of these plots are in the south of England, and management estimate these will generate potential gross profits of £94m if market conditions hold.

"Based on our financial appraisals, these plots will make substantially better margins," said chief executive David Ritchie, adding a further 3,000 plots with planning are under offer. "In many cases, these landowners have to sell because of debt they have to refinance,", he said. "Our net cash position means we're a very credible purchaser of land."

Revenues were impacted by the group placing 215 unsold apartments in the north of England in a 50:50 venture with a private investor. Properties were sold in at a "modest" discount to their market value, and all bar one have now been let, showing the strength of the private rental market. This will generate rental income prior to their sale in "a number of years".

Completions and average sales prices remained stable, but mortgage finance remains the key issue. Bovis hopes its "Perfect Ten" initiative with Barclays Bank (where first time buyers only have to provide a 10 per cent deposit on a selection of its developments) will lessen reliance on , including .

Bovis has to place 11 per cent of the property value on deposit, underwriting potential losses in the event of a repossession within the next seven years. "It gives the banks comfort, and creates another method to ," Mr Ritchie said.

Broker Panmure forecasts 2011 EPS of 16p, NAV of 547p and a final dividend of 4p.

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