Shares in Bovis Homes were up on the FTSE 250 in morning trading after the housebuilder said its profits for 2010 were "ahead of consensus" and that it would be resuming dividend payments.
Bovis said that it had achieved "a significant improvement" in its profits for 2010. The current consensus is that Bovis will make a profit of around £16 million.
Last year Bovis legally completed 1,901 homes, up five per cent from the previous year, at an average price of £160,700, up four per cent from 2009.
The rise in sales prices, combined with cost savings, mean that Bovis is likely to see pre-tax profit for the year 2010 ahead of consensus expectations, the company said.
At the end of 2010 Bovis said it had net cash of £52 million, down from £113 million at the beginning of the year. The group added that due to its "early success with its growth strategy" it was "confident" of continued success and was therefore recommending the resumption of dividends this year.
Despite their confidence Bovis said it expected trading conditions this year to be "subdued" and "uncertain", with mortgage approvals continuing to be low.
David Ritchie, Chief Executive of Bovis Homes, said, "We are pleased with the positive Group performance in 2010 and remain confident of our growth strategy through the acquisition of good quality residential land at attractive rates, which will provide an increase in sales outlets to support volume growth. Based on current market conditions this will deliver growth in profits and improved financial returns which will add significantly to future shareholder value."
By 09:45 shares in Bovis Homes were up 2.26 per cent on the FTSE 250 to 434.80 pence per share.