Deeper losses at Lovell fail to dent optimism

YJ LOVELL, the house building and construction company, was upbeat about prospects yesterday despite reporting losses that rose to pounds 3.9m before tax in the six months to 31 March, writes John Murray.

The company lost pounds 1.6m in the comparable period last year, a figure that was restated to comply with the new FRS3 accounting rules.

Anthony Hitchens, the chairman, said there were signs of a revival in the housing market. As a result the group has delayed making further provisions against its land bank in the hope that the pick-up would be sustained.

'The core businesses of the group continue to trade satisfactorily in difficult markets,' he said, 'although the discontinuing businesses are still a drain on the group's overall results.'

They accounted for pounds 3.3m of the losses. The UK housebuilding division lost pounds 2.8m, but that was offset by the UK partnerships division, which develops in tandem with local authorities and housing associations. It increased profits 48 per cent to pounds 3.2m.

'There are very welcome signs of increased housing activity, although the recovery is patchy,' he added. 'Nevertheless the underlying trend is undoubtedly upwards.'

He said the construction companies and partnerships division should continue to be profitable in the second half. The UK housing division should return to profitability next year.

Losses per share were 4.7p (1.9p) and there is again no interim dividend. The shares stuck at 21p.