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Sun June 13 2021

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Bovis Homes sees 50% jump in housing profits

19 Aug 13 First-half results from Bovis Homes show a 50% rise in its operating profit for housing compared with the same period last year.

The jump in housing operating profits to £20.4m comes against a smaller rise in revenue in the sector, which grew 17% from £157.1m to £183.2m. The operating margin was 2.4 percentage points, from 8.7% to 11.1%.

Overall operating profit was up 17% from £17.5m to £20.5m and pretax profits rose 19% from £15.6m to £18.6m.

Average sales prices increased by 15%, primarily due to a change in the mix. Average sales prices for this year's legal completions is expected to be at least 10% greater than 2012, due to the mix and achieving some modest price increases.

The half-year saw legal completions of 963 homes and a further 2,767 consented plots on 18 sites were added to its land bank. Contracts were in place as of 30 June to acquire a further 1,018 plots.

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"The group has performed strongly during the first half of 2013 and has delivered a 50% increase in housing operating profit," said Bovis Homes Group chief executive David Ritchie. "This significant increase is a result of the ongoing successful execution of the group's strategy reflecting the compound positive effect of increased volumes, improved average sales price and stronger profit margins.

"The group has delivered a 43% increase in private reservations in the year to date, resulting from the improving quality and increasing number of active sales outlets. This improvement has been further assisted by the positive effect of stronger home buyer sentiment, supported by the Help to Buy scheme launched in April 2013."

He added: "The positive trading position, combined with an increasing proportion of legal completions on new, more profitable sites, will enable the group to increase profits significantly in 2013 in line with its expectations, subject to stable market conditions."

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