Bovis Homes has announced strong preliminary results for 2011 which show profit before tax almost doubling and an 8 per cent increase in home completions.
The results showed a 22 per cent increase in revenue from £298.6m to £364.8m while operating profit jumped to £36.4m from £21.6m.
Profit before tax rose from £18.5m in 2010 to £32.1 in 2011 while home completions rose to 2,045 homes in 2011 from 1,901 legal completions the previous year.
Operating margin reached 10 per cent in 2011, as predicted in the company’s trading update in January.
Bovis Homes 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.”
Mr Ritchie added that significant progress has been made in positioning the group for “continued improving returns” through measures such as its land investment in recent years that it expects to deliver a “strong increase in active sales outlets in 2012”.
He added: “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.”
The group attributed an increase in gross profit margin (excluding land sales) to 20.8 per cent in 2011 from 17.9 per cent in 2010 to construction cost savings in 2011 and the increased contribution from legal completions on stronger profit margin sites acquired post the housing market downturn.
Overheads increased at the company by 13 per cent as the group invested in areas including sales and marketing to support its growing activity levels.
Further highlights include:
Terms agreed to acquire over 2,000 plots of land; Around 750 consented plots at an advanced stage of acquisition and around 500 plots contracted, subject to planning, with legal completion expected in 2012.
Average private sales price of £180,100 (2010: £172,300), an increase of 5 per cent
Average active sales outlets of 73 in 2011 (2010: 66), an increase of 11%
Private reservations in 2011 increased by 24% to 1,653 homes (2010: 1,334)
13,723 consented plots at 31 December 2011, with potential gross profit of £524 million, calculated using current sales prices and current build costs (31 December 2010: 13,766 plots with gross profit potential of £461 million)
18,749 potential plots of strategic land (2010: 17,325 potential plots)