Bovis Homes yesterday reported a £78.7m pre-tax loss for 2008 after revenues slumped 49% and it wrote down the value of its assets.
The housebuilder, which achieved profits of £123.6m in 2007, said it was hopeful activity will begin to improve as lower house prices and interest rates feed through into the market.
However, it warned visibility on the timing of the improvement was not good and that it was positioning itself for a continuation of current market conditions.
Bovis, which is based in Longfield, Kent, has renewed its bank loans and started 2009 with a large number of finished stock homes which it aims to sell at a "strong cash margin".
The company has secured 772 reservations for legal completion in 2009, compared to 1,262 at the same point in 2008. Despite the 39% fall, Bovis said the 330 reservations from private buyers in the first nine weeks of the year represented a 22% improvement on the same point a year earlier.
Bovis started 2008 with 1,039 employees but has since reduced its headcount by 60% to 441 following a recruitment freeze and two rounds of job cuts.
It cut its build programme from 3,500 units to 1,782, while only 173 plots were added to the land bank during 2008.
The average selling price of legal completions fell from £179,500 to £150,800, which Bovis said reflected the weaker market and a shift towards social housing.
Stripping out exceptional items, Bovis achieved operating profits of £21.3m at an operating margin of 7.5%, compared with £124.4m and a margin of 22.4% a year earlier. Revenues were £282.3m, against £555.7m in 2007.
Bovis wrote down the value of its land holdings by £75.2m, leading to the full-year loss.
It reported net debt of £108m at the end of 2008, a figure which Bovis intends to reduce to around £50m by the end of this year.
Bovis shares rallied by over 4% as analysts said the figures were in line with expectations.