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Bovis Homes to cut another 200 jobs

House builder Bovis Homes has warned that sales have slumped by nearly half and announced plans to cut around another 200 jobs.

Bovis employed around 1,000 staff a year ago and has already shed 400 jobs.

The second wave of cuts will take the headcount 60 per cent below the beginning of 2008, the group said - representing a further 200 redundancies.

It is thought just 370 staff will remain at the firm.

Forward sales at 1 January 2009 stood 48 per cent below the previous year at 425 - although it saw no further deterioration in 2008 trading since its last update two months ago.

The Kent-based house builder is weathering the market slump through other cash-saving moves such as cutting the final dividend.

In late December the firm renewed its banking facilities, which shores up its finances until March 2011.

But the firm said the current condition of the housing market and wider economy appeared “challenging”, with little impact from the Bank of England's drastic interest rate cuts.

A trading statement released today said: “Confidence is low, bad news predominates, and corrective economic actions which have worked historically have not yet seen a positive response.”

It added: “Accordingly, the group's priorities over the short term are to maintain its strong balance sheet capability to weather current market conditions in an orderly fashion and be well positioned for any market upturn.”

Despite the tough conditions, the firm is in a stronger position than rivals like Barratt Developments and Taylor Wimpey, which are carrying significantly higher levels of debt.

Last month Bovis Homes successfully renewed a £220 million lending facility.

Although its new bank facilities are more expensive, Bovis said its low debts and focus on cash generation put it in a better condition to capitalise on a recovery.

The statement said: “Interest rates are likely to remain low and with lower house prices, affordability will improve.”

Further reading click below:

Bovis debt renegotiation

Persimmon cuts debts

Taylor Wimpey firm asks subbies to cut costs