Are house building share dividends set to disappear?
In the week that Bovis Homes announced that it would be dispensing with shareholder dividends in the short term there is concern that this could be replicated amongst others in the housebuilding sector. While it does make sense for housebuilders to retain as much cash as possible as they try to reposition themselves in what is a very very difficult marketplace, many shareholders depend upon their share dividends to get by.
While housebuilding is the sector which has been in the forefront of the economic turmoil in the UK, as well as a UK banks, many are surprised that the dividend for Bovis Homes has been withdrawn entirely rather than just severely reduced. The company, like many others in the sector, has a mountain of debt and with business transaction levels at record lows, and unlikely to increase in the short to medium term, they did need to take evasive action.
Analysts will now need to go back to the drawing board for their projections for the sector over the coming months and years as well as their appeal to shareholders in the short term. Whether the likes of Bovis Homes has been placed under pressure by its lenders or taken a sensible action by itself is unknown but either way shareholders will see a significant reduction in their income.
Share this..
Related stories
British Airways reports 450,000 drop in passenger numbers
British Airways has today confirmed that 450,000 fewer passengers flew with the company in May 2010 compared to May 2009. However, a total of 8.6 million passengers used the company's services during May 2010 which was a 4.5% fall on the corresponding month in 2009. Heathrow, Glasgow and Edinburgh all saw passenger numbers fall by 6%, Aberdeen saw a fall of 4% with a 3% fall at Southampton and 2%...
Read MoreNissan cuts 25% of its Northeast workforce
News that car manufacturer Nissan is to make 25% of its workforce in the north-east of England redundant has sent shockwaves around the industry and the north-east in particular. Car manufacturing has been a major element of the replenishment of the area which took decades to recover from the death of mining. While the news does not come as a total surprise there had been little notice that anythi...
Read MoreIs UK bank lending reflecting the UK economy?
There has been much talk and much criticism of the UK banking industry with regards to "lacklustre" lending levels to small and medium-size businesses. However, in many ways the lending patterns of UK banks are currently reflecting the very difficult UK economic environment at the moment with the potential for further problems in the future. So are the banks right to hold back on further lending?...
Read MoreIf you don't ask you won't get!
While the UK financial sector has been in meltdown over the last 18 months there are signs of recovery in the property sector, credit cards and the mortgage market. However, even though we are seeing the injection of competition in these particular areas it appears that many UK consumers are still afraid to ask for the best deals. Remember, if you don't ask you won't get!
It is wort...
Lloyds bank shares fall 30% on EU concerns
Amid concerns that the European Union could effectively outlaw the merger of Lloyds bank and HBOS we saw a significant fall in the share price of Lloyds bank yesterday. The shares fell by 30% as it became apparent that EU leaders have yet to ratify the rescue package and may actually demand that large chunks of the operation are sold off to third parties. This is despite the fact that the UK gover...
Read More