Cheltenham-based housebuilder Westbury shrugged aside a 26 per cent drop in its half-year profits - already flagged up in a cautious trading statement in September - by raising its interim dividend by 15 per cent yesterday.
After some hesitation early on, the stock market accepted the assurance that this was a mark of medium-term confidence despite what Westbury chairman Geoffrey Maddrell described as "a difficult year for our industry".
The shares finished 3p ahead at 435p, where they will yield 4.4 per cent if the final pay-out is raised in line with yesterday ' s 6 . 1525 p half-timer.
"The dividend is to show the confidence we have in the future," said Colin Cole, a director. "We are prepared to accept a rather lower cover in the present market. We are confident in the market in the medium to longer term."
A £45.5 million profit on continuing operations during the six months to August - not counting a £1.5 million loss from the sale of Incresco, a financial services offshoot --was 26 per cent down on the same months last year, while sales slipped by 2.7 per cent to £415.3 million.
That turnover included £33.5 million from land sales - £10 million more than last year - and the sales and leaseback of a portfolio of show homes. The operating profits from the mainstream homes operation was 20 per cent lower at £57.7 million as margins fell by 2.8 per cent to 14 per cent.
Mr Cole attributed this fairly evenly to a squeeze on prices, the need by offer buyers incentives such as free carpets and lower volumes caused by planning difficulties.
Westbury sold 1,934 homes in the half-year down from 2,087 at an average price of £195,900, against £192,150.
It is still sticking by its ambition to be building 7,000 homes a year by the end of the decade.
Space 4, Westbury's Castle Bromwich subsidiary making houses in factory-built components, broke even for a second half-year, selling 798 units internally to other parts of Westbury and 227 to external customers, up from 143 this time last year.
For the full year, Space4 is expected to sell between 2,500 and 2,750 units, up from 2,200 in 2004/05.
Westbury has won regeneration contracts this autumn to renew sites in Coventry and Telford. In partnership with Bovis Homes and Keepmoat, Westbury will provide more than 3,000 new and refurbished homes there.
Commenting on the results, Mr Maddrell said "Although this is proving a difficult year for our industry, the fundamentals are still sound with potential demand exceeding supply. We firmly believe that our strategy through volume growth is achievable over the coming years."