Housebuilder Bovis Homes has revealed its annual profits have fallen by more than a quarter as it built fewer homes last year.

However, the New Ash Green-headquartered company is in confident mood, announcing it will pay £180 million in special dividends over the next three years.

The business, which has developments across the UK, including Dartford and Headcorn, reported a 3% drop in revenues to £1.03 billion despite its average selling price increasing 7% to £272,400.

It said the growth in sales prices was down to changes in its mix of housing and modest price inflation.

Pre-tax profits fell 26% to £114 million, partly down to £10.3 million of one-off payments, including £3.5 million paid to customers to fix issues with poorly constructed homes.

It said it had made investment across the business "in particular in customer service and site management to address operational challenges".

A profit warning at the end of 2016 triggered a chain of events that saw its long-time chief executive David Ritchie eventually replaced with former Galliford Try boss Greg Fitzgerald.

It was revealed it had offered to pay customers up to £3,000 to move into unfinished homes to meet end of year targets.

The company made 3,645 completions in 2017, down 8%, but said it is on track to finish 4,000 homes this year.

Despite its lukewarm results, it still hiked its dividend by 6% to 47.5p.

It announced a first special dividend payment of £60 million, equivalent to about 45p per share, expected to be paid towards the end of 2018.

Over the next three years it will pay £180 million in special dividends, equalling around 134p per share.

Following the news, the FTSE 250 company enjoyed a 1.5% boost in its share price to about £10.66 in early trading.

Chief executive Greg Fitzgerald said: "I am very pleased with the level of operational progress the group has made during the year.

"We have significantly improved our customer satisfaction through a series of initiatives and controlled period ends.

"In addition, we have completed our restructuring, invested in our people, systems and processes, and comprehensively reviewed our land bank.

"The group fundamentals are strong, and with the business turning around I am excited about future years.

"In 2018, we will deliver a controlled increase in volume, continue to build upon our high level of customer service, drive profitability, and complete our balance sheet optimisation.

"We will also continue to invest in our people and systems, and I'm particularly looking forward to launching our new housing range in April."