Bovis reveals return of divi as sales and prices surge

Housebuilder Bovis Homes will pay a dividend again this year after reporting growth in both house sales and prices.

Annual profits are expected to beat forecasts after the group reported a 4 per cent rise in average selling prices over 2010 to 160,700 and said sales completions rose 5 per cent to 1,901 homes.

Bovis said its selling price hike was driven by private sales, with 1,592 completions against 309 for social homes.

It now expects underlying pre-tax profits to top City predictions of 16.3 million - and in May will restart paying shareholder dividends for the first time since the financial crisis struck in 2008. Bovis, which does not build in Scotland, also bought around 3,700 plots in 2010, mostly in the south of England, and agreed terms on a further 2,500.

Its update follows similarly positive news from housebuilders Persimmon, Barratt and Edinburgh-based Miller Group, and received an upbeat reaction despite ongoing worries about the housing market and mortgage availability.

Simon Brown, of Matrix Corporate Capital, said: "Bovis appears well positioned to take advantage of any recovery in activity if the cycle turns in its favour, particularly in its heartland of southern England." Shares closed up 12p or 2.8 per cent at 437.2p.