Bovis Homes has said it expects trading conditions during 2010 to be “subdued”, in a statement issued today.
In the trading update, ahead of the reporting of its preliminary results for the year ended 31 December 2009 on Monday 8 March 2010, the house builder said it had legally completed 1,803 homes in 2009, down a fraction on 2008’s tally of 1,817.
Of these, 1,527 were private homes, up 25% on the prior year (2008: 1,223) and 276 were social and partnership homes (2008: 594).
At £154,600, the Group’s average sales price in 2009 was 2.5% higher than the equivalent in 2008 (£150,800). Bovs Homes said this rise was affected by a falling contribution from lower priced social and partnership homes, which made up just 15% in 2009 compared to 33% in 2008.
The average sales price of the Group’s private homes in 2009 was £165,500 versus £181,000 in 2008.
Bovis Homes said it anticipates pre exceptional pre-tax profit will be in line with the board’s expectations.
During 2009, the house builder achieved 1,801 private reservations, 82% up on the previous year’s 989 private reservations. At the end of the year, its sales order book for 2010 stood at 643 homes, some 218 homes greater than the same position in 2008.
As at 31 December 2009, Bovis Homes had net cash of £113m (2008: net debt £108m) reflecting a cash inflow of £221m over the year. Of this, £162m arose from trading with the remaining £59 million arising from the Group’s share placing in September.
The house builder said its strategy was to grow its output capacity through the acquisition of residential land, providing an increase in sales outlets to support volume growth, and, in so doing, contributing to growth in profits and improved financial returns.
Bovis Homes added that it had made good progress in securing further construction cost savings and has re-entered the residential land market during the latter part of 2009 following a successful period of de-gearing and supported by its share placing.
The statement concluded: “The Group continues to expect trading conditions in 2010 to be subdued relative to historical levels, given ongoing economic uncertainty. Mortgage approval volumes are slowly rising, but mortgage providers continue to require record high levels of deposits, particularly from first-time buyers.
“This all said, longer-term market demand and supply trends remain positive. With a strong balance sheet and a clear strategy, the Group is confident of its ability to create value for its shareholders into the future.”