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H1 results: Bovis bullish on Brexit as profit rises 18%

Bovis Homes has reported an 18 per cent growth in revenue and operating profit in its latest half-year results.

The housebuilder saw revenue rise to £412.8m for the six months to 30 June 2016, up from £350.7m in the same period a year earlier.

Operating profit rose by 18 per cent to hit £63.9m, up from £54.3m.

Chief executive David Ritchie said the firm “remains confident” it will continue to grow in spite of the impact of the EU referendum and the Bank of England’s reduction of interest rates.

“Whilst it is too early to judge the impact of the EU referendum and the Bank’s monetary policy response on the UK housing market, the underlying market fundamentals for UK housing remain positive,” he said.

The company completed a record number of homes in H1 2016, with 1,601 homes delivered in the first half of the year, while reservation rates have seen an increase in August after a “short-term slowdown” in July.

City analysts Jefferies shared the firm’s positive outlook, saying that the housebuilder’s “management is focused on disciplined growth rather than growth at any cost, focused on returns on capital rather than striving to reach a specific volume target”.

“H1 looked good to us and was not flattered by land sales, and with roughly two-thirds of profit to come in the second half (backed up by a strong order book), H2 is already better looking.”

Bovis now has a strategic landbank of 25,484 plots across 90 sites, while 1,267 new plots of consented land were acquired in the first half of the year, across 11 sites.

Average sales price increased by 14 per cent in H1 to reach £254,500 (H1 2015: £222,300).

The housebuilder posted record full-year results in 2015, with revenue of £946.5m and a pre-tax profit of £160.1m.

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