Bovis Homes profit jumps 50 per cent as sales prices rise

HOUSEBUILDER Bovis Homes posted a 50 per cent jump in first-half profit on the back of higher sales prices and said it expects current strong trading to significantly boost full year profits.

Bovis, one of a number of builders that are benefiting from recent government schemes that have lifted home buyer sentiment, today said it had secured 1,712 private reservations in the 32 weeks to August 9, a 43 per cent increase compared to the same period last year, and was now 90 per cent sold for the full year 2013.

Its operating profit for the six months to the end of June rose to £20.4m from £13.6m a year ago, on a 17 percent increase in revenue to £183.2m. Pre-tax profit rose 19 per cent over the period to £18.6m.

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”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,” chief executive David Ritchie said.

“With a further increase in capital turn, this strong profit is expected to generate a return on capital for 2013 of at least 10 per cent,” he said.

The company’s average sales price rose 15 per cent to £188,500, ahead of its own expectations, primarily due to it building more lucrative family homes than apartments. It said it sees the average sales price for 2013 completions to be at least 10 per cent greater than 2012.

It increased its interim dividend by 33 per cent to 4 pence per share.

Shares in Bovis closed at 778.5 pence last Friday, valuing the company at £1.04bn.