Bovis bullish on the back of strong first half results

by: Edward Murray
  • 15/08/2016
  • 0
Bovis bullish on the back of strong first half results
Following a strong start to the year, house builder Bovis Homes Group has reported that it had achieved over 90% of its planned home sales for 2016 by 12 August.

Releasing its results for H1 2016, Bovis said legal completions of new homes were up 5% at 1,601 on H1 2015. It also reported a 14% rise in its average sales price for the half with the figure standing at £254,500. This compares to the £222,300 average price achieved in H1 2015.

Looking ahead, the house builder has a steady consented land bank of 19,477 plots across 138 sites, down marginally on the 19,814 plots across 142 sites held at 31 December 2015. However its strategic land bank has grown and at 30 June 2016 stood at 25,484 plots across 90 sites, up from the 23,083 plots held across 80 sites on 31 December 2015.

“We have delivered a record number of homes in the first half of 2016 which has driven strong profit growth, improved returns and a 9% increase in the interim dividend,” said Bovis chief executive David Ritchie.

He added: “Our forward sales position means we are well placed to continue this strong performance through the remainder of the year.”

Ricthie said it was too early to accurately assess the impact of the Brexit vote or the Bank of England’s monetary response on the UK housing market. However, he added: “The underlying market fundamentals for UK housing remain positive. We have been pleased with the resilient level of interest shown by potential home buyers contacting us.”

Bovis generated total revenues of £412.8m during the first half of 2016, an increase of 18% compared to the £350.7 million in H1 2015.

Despite construction costs for legal completions in H1 2016 increasing from £117,300 to £132,900, Bovis increased operating profit for H1 by 18% to £63.9 million with an operating profit margin of 15.5%. This was the same margin reported in H1 2015.

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