Housebuilder Bovis Homes is braced for further tough conditions after reporting a 80% slump in half-year profits.
The group's pre-tax surplus for the six months to June came in at £9.5 million, down from £58.4 million for the previous year, after what it described as its toughest trading period as a public company.
Revenues were down 43% at £149.3 million, driven by a 32% drop in house sales to 851. This trend worsened since the half year end, the company added, with completions down 39% during the year to August 22.
The firm said: "The group considers that the current difficult trading environment will continue for the foreseeable future with continued poor mortgage liquidity limiting housing market activity."
As signalled by the firm in July, Bovis said staff numbers at its offices and on-site were 40% down from the start of this year.
The company is the second major UK housebuilder to report interims this month, after Persimmon last week which unveiled a 64% profits slump.
Kent-based Bovis said its average sale price during the first half of the year - across both private and social housing - was £167,600, down 12% compared to the same period in 2007.
Bovis warned that due to the current market uncertainties it was committed to competitive pricing in order to "achieve volume delivery".
It added: "Given current sentiment, this is likely to further reduce private sales prices and profit margins achievable on incremental reservations over the remainder of 2008."
Bovis has shut its eastern regional office in Cambourne, Cambridgeshire as part of around 400 job losses this year. It has also merged the key functions of its northern and central regions.
In another move to save cash, the company said it was slashing its interim dividend by more than 70%. As previously announced, it is paying out 5p compared to 17.5p in 2007.
But Bovis allayed fears it would have to write down the value of its land bank, which it said was of high quality and had strategic benefits.
Broker Citi said Bovis' results were weaker than expected. Analyst Mark Hughes said the profits drop was "hardly surprising" and "just more confirmation of the very difficult times faced by the housebuilders."
He is forecasting Bovis to make £31 million of pre-tax profits this year, compared to £124 million in 2007.