HOV IMPROVES CASH FLOW
Hovnanian Enterprises says it is tripling its forecast for positive cash flow this year to $300 million from earlier “guidance” given to investors.
The announcement came with this morning’s report by the publicly traded homebuilder, based here in Red Bank, that it had achieved positive cash flow in the just-completed second fiscal quarter, one quarter ahead of expectations.
The focus on stanching a loss of cash comes as Hovnanian, like most players in its sector, struggles with one of the worst housing markets in a generation.
The company reported that it delivered 2,494 homes during its second quarter, down 21 from the same quarter a year ago. Net contracts were down 29 percent.
A cancellation rate of 29 percent of gross contracts for quarter represented improvement compared to both last year’s second quarter (32 percent) and to this year’s first quarter (38 percent), the company reported.
As of April 30, Hovnanian’s contract backlog was 3,577 homes, a decrease of 54 percent from the same quarter a year ago.
The company’s shares, which trade on the New York Stock Exchange, open today at $11.87. They’ve been as high as $7.04 and as low as $4.25 in the past 52 weeks.