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Bovis completions rise by 18pc

Bovis saw completions increase by 18 per cent in the first six months of 2012.

Posting a trading update for the six months ended 30 June 2012, Bovis said it has seen significantly higher visitor numbers compared to prior years, but home buyers are taking longer to make their purchase decision and still face “a challenging mortgage process”.

With £3.9 million of profit from land sales it expects a 10 per cent operating margin for the half year, compared with 7.5 per cent in H1 2011. It reported a 10 per cent margin for 2011 earlier this year.

Completions rose 18 per cent to 944 homes, compared to 801 homes in the same period in 2011, with average selling prices up 1 per cent year on year to £164,400. Stronger sales prices on new sites was offset by a higher number of completions from the midlands and northern sites at lower prices.

Chief executive David Ritchie said:  “The continued success in the land market during the first half of 2012, with around 2,500 new plots contracted, is positioning the group for further growth in the future.”

Bovis said it is using NewBuy for over 10 per cent of private reservations. Including social housing, it expects to complete 1,646 homes this year (30 June 2011: 1,333 homes).

The average sales price on private reservations in the second half is forecast in excess of £200,000, compared to £175,000 in H1.

Bovis has acquired 1,835 consented plots on 11 sites, of which 1,037 are included in the land bank at 30 June 2012 and 798 expected to be added to the land bank in early H2.  It is set to acquire 649 plots on six sites, while terms have been agreed in principle on a further 20 sites, representing more than 3,000 plots.

The firm also has net cash of £23m as at 30 June 2012.

Bovis is forecasting more completions from a greater number of active sales outlets, higher average sales prices driven by south England and improved profit margins from better value land bought since the housing market downturn.

Half year results are expected on 20 August.

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