VTY Vistry Group Plc

U.K. house builder Bovis Homes Group PLC (BVS.LN) Friday said it plans to be "quite assertive" in the land market in 2010 following a quiet year for construction, but said it expects 2010 to be another subdued year for sales as mortgage approval volumes slowly rise.

Bovis said it has now has credit approval, subject to documentation, for a replacement GBP150 million syndicated facility which would mature in September 2013 and be more affordable than the current deal. Bovis said that this facility, added to its net cash of GBP113 million, would allow it to be an attractive land buyer in the market.

The company, which spent 2009 selling stock with little building work going on, said it re-entered the residential land market in the latter part of 2009, and has already acquired four sites with terms agreed in principle on a further 15 sites.

Speaking to Dow Jones Newswires, Chief Executive David Ritchie said it was Bovis' ambition to entice land vendors with more guaranteed cash up front. Housebuilders don't usually pay landowners cash up front, instead deferring payments over a period of time; Bovis still plans to defer some payments to land vendors, who have been reluctant to sell their land at current, lower prices.

He added on a conference call with analysts that Bovis' overheads would have to increase as it replaces the land buying team it laid off in 2008 and hires specialist technical support. It will also look to bring back bonuses.

Bovis said it expects 2009 pretax profit before exceptional items to be in line with the board's expectations, but it didn't say what these were. However on the conference call Finance Director Neil Cooper said the most recent market figure was around GBP7 million.

The company said that at the end of 2009 it had net cash of GBP113 million compared with net debt of GBP108 million a year earlier. The end figure was considerably above the GBP90.6 million estimate from analysts at Panmure Gordon, who kept their "buy" rating following the update.

Bovis said it legally completed the sale of 1,803 homes in 2009, similar to the 1,817 in 2008. Of these, 1,527 were private homes--a 25% rise on 2008--although the average sale price of these houses fell to GBP165,500 from GBP181,000.

At the end of 2009, the company's sales order book for 2010 totaled 643 homes for delivery--some 218 homes more than at the same time a year earlier.

At 1051 GMT, shares were down 12.4 pence, or 2.7%, at 441.7 pence, while the wider FTSE All-Share was up 0.4%.

Bovis will post its 2009 results March 8.

Company Web site: www.bovishomes.co.uk

-By Rachael Gormley, Dow Jones Newswires; 44-20-7842-9308; rachael.gormley@dowjones.com

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