Bovis Homes To Declare A Dividend For 2010, Legal Completions +5% To 1,901
January 14 2011 - 1:49AM
Dow Jones News
Bovis Homes Group PLC (BVS.LN), a U.K. home builder announced
Friday for the year ended December 31, 2010, that due success with
its growth strategy and confidence in its further delivery, the
Group will declare a dividend for 2010.
MAIN FACTS:
-In line with management expectations, the Group legally
completed 1,901 homes in 2010 (2009: 1,803 homes), an increase of
5%.
-The Group's average sales price in 2010 was GBP160 700, 4%
higher than the equivalent of GBP154,600 in 2009.
-This increase was driven by growth in the Group's average
private sales price in 2010 to GBP172,400 from GBP165,500 in
2009.
-Improved sales prices during the year combined with the benefit
of build cost savings primarily on second half legal completions
have increased the gross margin.
-With overheads in line with expectations, the Group expects the
operating profit margin for 2010 to be at least 7%.
-Given the Group's strong performance, it is anticipated that
the profit for 2010 will be ahead of consensus expectations as at
the date of this trading update.
-At January 1, 2011, the Group held a forward sales order book
for 2011 delivery of 420 homes.
-The forward sales position at the start of 2010 was 643 homes,
including a non recurring sale of 215 homes sold to a joint venture
in which the Group holds a 50% stake.
-The Group has achieved its target of substantially matching
production with legal completion volumes in 2010.
-As at December 31, 2010, the Group held housing work in
progress equivalent to 1,093 homes (2009: 986 homes).
-This will facilitate the early legal completion of homes
reserved in the first half of 2011 and will support the overall
growth aspirations of the Group for the year.
-The cash position of the Group as at December 31, 2010 remained
strong, with net cash of GBP52 million, having started 2010 with
GBP113 million of net cash.
-The overall cash outflow was contributed to by payments during
the year of GBP138 million relating to land investment, with strong
operating cash inflows pre-land expenditure of GBP93 million.
-The Group has outlined its growth strategy to acquire good
quality residential land which will provide an increase in sales
outlets to support volume growth, and based on current market
conditions will deliver growth in profits and improved financial
returns.
-The Group has been successful in 2010 in acquiring consented
land, adding 3,700 plots to the land bank at a cost of GBP203
million and with a gross profit potential of GBP181 million.
-Furthermore, the Group has terms agreed for the acquisition of
an additional c.2,500 plots.
-The Group continues to expect trading conditions in 2011 to be
subdued relative to historical levels, with ongoing economic
uncertainty.
-Mortgage approval volumes remain weak, with mortgage providers
requiring high levels of deposit, particularly from first time
buyers.
-The Group is confident of its ability to deliver on its growth
strategy, which will add significantly to future shareholder
value.
-Shares closed Thursday at 425.50 pence
-By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411;
zechariah.hemans@dowjones.com
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