Strong profit growth for Bovis Homes
An 8% increase in houses sold, rising prices and a greater focus on margins combined to grow pre-tax profits by 74% at Bovis Homes last year.
For the year to 31 December 2011, Bovis Homes has reported revenue up 22% to £364.8m (2010: £298.6m).
Legal completions, at 2,045 homes, were 8% up on 2010’s 1,901 completions. The average private sales price of £180,100 was up 5% on 2010’s £172,300.
The result was operating profits up 69% to £36.4m (2010 £21.6m) and pre-tax profits up 74% to £32.1m (2010: £18.5m).
The return on capital employed improved from 3% to 5% in 2011, and a further improvement to 7% on ROCE is anticipated in 2012.
Chief executive David Ritchie said: "The group has delivered a strong improvement in profit in 2011 against a challenging but stable market environment. This profit improvement has been delivered through the compound positive effect of increased volumes, improved sales prices and stronger margins.
"Significant progress has also been made in positioning the group for continued improving returns. The substantial land investment in recent years will deliver a strong increase in active sales outlets in 2012. Based on a continuation of current market conditions, this will further enhance volumes, sales prices and profit margins.
"As well as driving profitability, the group is focused on enhancing shareholder returns through improving the efficiency of its capital employed, through land bank management, including the sale of consented plots on selected sites, and by managing working capital tightly.
"Looking forward, based on current market conditions continuing, increasing profits combined with further improvements in the use of capital will deliver a strongly increasing return on capital employed in 2012 and beyond.”
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This article was published on 27 Feb 2012 (last updated on 28 Feb 2012).