TIDMBVS
RNS Number : 8414C
Bovis Homes Group PLC
14 March 2011
14 March 2011
BOVIS HOMES GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
STRONG IMPROVEMENT IN PROFITS: SIGNIFICANT PROGRESS IN GROWTH
STRATEGY
Bovis Homes Group PLC today announced its preliminary results
for the financial year ended 31 December 2010 which have been
prepared in accordance with International Financial Reporting
Standards as adopted by the EU ('IFRS').
2010 2009
-------------------- ---------- ----------
Revenue GBP298.6m GBP281.5m
Operating Profit GBP21.6m GBP17.4m
Operating Margin 7.2% 6.2%
Profit Before Tax GBP18.5m GBP7.5m
Earnings per Share 10.6p 4.4p
Dividend per Share 3.0p Nil
Net Cash GBP51.7m GBP112.3m
Prior year numbers are stated pre exceptional items. There were
no exceptional items in the current year.
Financial Highlights:
-- Pre tax profit increased to GBP18.5 million (2009: GBP7.5
million pre exceptional items)
-- Basic earnings per share increased to 10.6p (2009: 4.4p pre
exceptional items)
-- Recommencement of dividends with a proposed payment of 3.0p
for 2010 (2009: Nil)
-- Improvement in gross margin at 17.9% (2009 pre exceptional
items: 16.1%)
-- Increase in operating margin to 7.2% (2009 pre exceptional
items: 6.2%)
-- GBP52 million of net cash at 31 December 2010 (2009: GBP112
million)
-- Strong trading cash inflows during 2010 of GBP93 million
-- Net land expenditure of GBP137 million
Land Highlights:
-- Significant progress with land investment strategy with
acquisitions located mainly in the south of England:
-- c3,700 consented plots added in the year
-- Terms agreed at 31 December 2010 to acquire a further 2,500
plots, of which 875 plots have been acquired as at the date of this
announcement
-- Strong land bank with significant future margin
potential:
-- 13,766 plots of land with planning consent as at 31 December
2010, with potential gross profit of GBP461 million, calculated
using current sales prices and current build costs (31 December
2009: 12,042 plots)
-- 17,325 potential plots of strategic land (2009: 16,363
potential plots) with 822 plots converted to consented land bank in
2010
Outlook
-- Encouraging start in the first 9 weeks of 2011 for enquiries
and visitors, with reservations up 11% on a similar number of
active sales outlets
-- 33 new sales outlets expected to open in 2011 representing
the most significant site launch programme for many years
-- A 15% increase expected in average number of active outlets
to 76 in 2011 from 66 in 2010
-- Improving return on capital employed through growth in
profits and enhanced capital turn
Commenting on the results, David Ritchie, the Chief Executive of
Bovis Homes Group PLC said:
"The Group has delivered a strong improvement in profit in 2010,
driven by increased volumes, stronger sales prices and delivery of
cost savings.
The Group has also made significant progress with its growth
strategy through substantial land investment, a strong pipeline of
further land acquisition opportunities and a strong expected
increase in active sales outlets. Based on a continuation of
current market conditions, this growth strategy gives the Group
confidence in delivering greater volumes and increased profits.
The Group is focused on enhancing shareholder returns through
increased profitability and improved efficiency of its capital
employed. To this end, the Group anticipates selling land on a
number of its larger sites and combining the cash generated with
its existing strong financial resources to support further land
acquisitions. This will enhance the spread of land controlled by
the Group leading to an increase in active sales outlets in the
future.
Given the sustainable improvement in the performance of the
Group and the Board's confidence in the Group's growth strategy, it
has taken the important step of resuming the payment of
dividends.
After a challenging but rewarding year, I would like to thank
all of our employees for their hard work and commitment during
2010."
Enquiries: David Ritchie, Results Andrew Jaques /
Chief Executive issued Reg Hoare / James
by White
Jonathan Hill,
Finance Director
Bovis Homes Group MHP Communications
PLC
On 14 March- tel: 07855 On 14 March - tel:
432 699 020 3128 8100
Thereafter - tel: 01474
876200
Certain statements in this press release are forward looking
statements. Forward looking statements involve evaluating a number
of risks, uncertainties or assumptions that could cause actual
results to differ materially from those expressed or implied by
those statements. Forward looking statements regarding past trends,
results or activities should not be taken as a representation that
such trends, results or activities will continue in the future.
Undue reliance should not be placed on forward looking
statements.
Introduction
Bovis Homes is pleased to report on a successful year in 2010
with strong improvement in profits and earnings and with
significant progress in the acquisition of high quality consented
land. Importantly, the Group operated successfully and grew its
business without reliance on improving general market conditions.
The Group's performance during 2010 was particularly positive given
the continuation of challenging conditions within the UK housing
market, with the constrained level of high loan to value mortgage
finance available to new build customers, many of whom have limited
deposit funding.
The Group legally completed a greater number of home sales
during the year and, in respect of private homes, increased the
average sales price achieved, reduced the average construction cost
and hence improved the average profit generated per private home by
13%. These achievements have contributed to the strong increase in
pre tax profits.
The Group's strategy is to increase investment in quality
residential land in order to grow sales outlets and thus volume,
revenues and margins. Having avoided buying significant amounts of
land at the peak of the market and with land values having reduced
considerably since the downturn, the Group has adopted an assertive
land acquisition strategy since the end of 2009. With the supply of
consented land likely to be constrained in the future, given the
planning environment, and the current reduced level of competition
to acquire residential land, the Group believes that this is an
excellent time to invest. Moreover, the robust profit margins at
which the Group has acquired consented land provide returns capable
of enhancing shareholder value whilst being sufficient to withstand
general fluctuations in the housing market. Assuming the
continuation of current market conditions, the Group can increase
significantly its returns on both capital employed and equity over
the coming years.
Revenue
During 2010 the Group generated total revenue of GBP298.6
million, compared to total revenue in 2009 of GBP281.5 million.
Housing revenue in 2010 was GBP305.6 million, 9.6% ahead of the
prior year (2009: GBP278.8 million). Of this revenue, GBP12.9
million has not been recognised in the financial statements in
2010. This is due to the fact that the Group holds a 50% equity
stake in a private rental joint venture into which the Group has
sold a portfolio of 215 new homes. This revenue and associated
profit will be recognised as and when the joint venture investment
is disposed or the homes in the joint venture are sold. As a
result, the Group's reported housing revenue for 2010 was GBP292.7
million (2009: GBP278.8m). Other income was GBP5.9 million (2009:
GBP2.7 million). The Group chose not to sell any consented
residential development land in either 2009 or 2010.
With 1,901 legal completions achieved during 2010, the Group's
volume performance was 5% ahead of the previous year (2009: 1,803
legal completions). The volume of private homes in 2010 increased
by 4%, with 1,592 legal completions in 2010 versus 1,527 units in
2009. The volume of social homes legally completed increased to 309
units from 276 units (16% of total volume, compared to 15% in
2009).
The Group's average sales price in 2010 increased by 3.9% to
GBP160,700 (2009: GBP154,600). This was primarily due to the
average sales price of the Group's private legal completions
increasing to GBP172,300 in 2010 from GBP165,500 in 2009. Excluding
the 215 units sold into the joint venture, which were typically
small units in lower price locations, and which were sold at a
modest discount to market value, the private average sales price
increased by 9.1% to GBP180,600. Of this increase, the Group
considers around 3% to reflect market price movements with the
balance delivered through the improving mix of products in terms of
size, type and location.
The average size of the Group's private homes grew by 1.0% to
1,004 square feet in 2010 from 993 square feet in 2009 and the
sales price per square foot increased by 3.1%. The Group's social
homes also increased in average size to 792 square feet in 2010
from 762 square feet in 2009. Overall, the average size of the
Group's legally completed homes increased by 1.3% to 970 square
feet in 2010 from 958 square feet in 2009 and the sales price per
square foot increased by 2.7%.
Operating profit
The Group delivered an operating profit for the year ended 31
December 2010 of GBP21.6 million at an operating margin of 7.2%, as
compared to GBP17.4 million, before exceptional items, in the
previous year, at an operating margin of 6.2%. There were no
exceptional items in the current year.
Gross margin increased to 17.9% in 2010 from 16.1% (pre
exceptional gains) in 2009. Stronger average sales prices combined
with the initial benefit of construction cost savings in the second
half of 2010 contributed strongly to the gross margin, more than
offsetting the negative impact of a higher cost of land after the
2009 year end land write back. The negative impact of this change
in land cost lowered the achieved gross margin by over one
percentage point. The Group has delivered a materially improved
gross margin in H2 2010 of 18.9%, compared to 16.3% in H1 2010.
With sales prices expected to remain stable during 2011, the
positive effect of the build cost savings achieved in H2 2010 will
contribute throughout 2011. Subject to current market conditions
continuing, this provides confidence that the gross margin achieved
in the second half of 2010 can at least be sustained in 2011.
As anticipated, overheads increased in 2010 by 14%. Underlying
overheads increased year on year by 3%, as the Group invested in
supporting the growing activity levels, with the remainder of the
increase arising from the increase in staff bonus charge,
reflecting the strong performance of the Group. As a result, the
overheads to revenue ratio increased from 9.9% in 2009 to 10.6% in
2010. Pre the effect of staff bonus, the overheads to revenue ratio
was 9.3%, compared to 9.6% in 2009.
Pre tax profit and earnings per share
The Group achieved profit before tax of GBP18.5 million,
comprising operating profit of GBP21.6 million, net financing
charges of GBP3.2 million and a profit from the joint venture of
GBP0.1 million. This compares to GBP17.4 million of pre-exceptional
operating profit and GBP9.9 million of net financing charges in
2009 which generated GBP7.5 million of pre-exceptional profit
before tax in that year. The Group had no exceptional items in 2010
(2009: GBP2.7 million exceptional charge). After accounting for
exceptional charges, the Group achieved a pre tax profit of GBP4.8
million in 2009.
Basic earnings per share for the year was significantly improved
at 10.6p compared to pre exceptional basic earnings per share of
4.4p and basic earnings per share after exceptional charges of 2.8p
in 2009.
Dividends
In the light of the sustained improvement in the performance of
the Group and the Board's confidence in the Group's growth
strategy, the Board has proposed a full year dividend of 3.0p per
share. This is equivalent to an interim dividend of 1.0p per share
and a final dividend of 2.0p per share, had both an interim and a
final dividend been declared in 2010. In future years the Board
expects to grow dividends progressively, as earnings per share
increase.
Financing & cashflow
The Group incurred net financing charges of GBP3.2 million in
2010 (2009: GBP9.9 million pre exceptional charges). This reduction
in finance costs arose, firstly, from the strong average net cash
position of the Group throughout 2010 (the Group had an average of
GBP78 million of net cash during 2010, as compared to an average
net debt of GBP9 million in 2009), and, secondly, from the
significantly more cost effective bank facilities agreed in January
2010. Net bank charges for 2010 were GBP2.2 million (2009: GBP8.6
million), which included the amortisation of arrangement fees
(GBP0.6 million) and commitment fee charges (GBP2.0 million). The
Group incurred a GBP2.7 million finance charge (2009: charge of
GBP1.7 million), reflecting the difference between the cost and
nominal price of land bought on deferred terms which is charged to
the income statement over the life of the deferral of the
consideration payable. The Group benefited from a GBP0.2 million
(2009: GBP0.2 million) net pension financing credit during 2010.
This credit arose as a result of the expected return on scheme
assets being in excess of the interest on the scheme obligations.
The Group also benefited from a finance credit of GBP1.2 million
(2009: GBP0.6 million) arising from the unwinding of the discount
on its available-for-sale financial assets during 2010. There were
also GBP0.3 million of other financing credits during the year
(2009: GBP0.4 million of other charges).
Having started the year with a net cash balance of GBP112.3
million, as at 31 December 2010 the Group's net cash balance was
GBP51.7 million with GBP67.0 million of cash in hand, offset by
GBP15.2 million of loans received primarily as part of the
Government's Kickstart programme and a GBP0.1 million interest rate
derivative fair value adjustment.
In line with expectations, the Group generated operating cash
inflow pre land expenditure of GBP93 million. This demonstrates the
strong underlying cash generation from the Group's existing assets.
Net cash payments in 2010 for land investment were GBP137
million.
Taxation
The Group has recognised a tax charge of GBP4.5 million on pre
tax profits of GBP18.5 million at an effective tax rate of 24.1%
(2009: tax charge of GBP1.3 million at an effective rate of 27.1%).
The effective rate is below that expected owing to the benefit of
land remediation allowances and the finalisation of prior years'
tax submissions. The Group has recognised a current tax liability
of GBP1.5 million in its closing balance sheet as at 31 December
2010 (2009: current tax asset of GBP0.8 million).
Pensions
Following a roll-forward of the valuation of the Group's pension
scheme, with latest estimates provided by the Group's actuarial
advisors, the Group's pension scheme had a deficit of GBP2.9
million at 31 December 2010, a decrease of GBP6.0 million on the
opening deficit of GBP8.9 million at 31 December 2009. Scheme
assets grew strongly over the year to GBP73.5 million from GBP67.6
million and the scheme liabilities decreased to GBP76.4 million
from GBP76.5 million, reduced by the use of CPI rather than RPI
where relevant (GBP4.6 million), offset by a fall in bond yields
and improved mortality assumptions. As well as benefiting from a
generally stronger stock market in 2010, scheme assets benefited
from a GBP1.5 million special cash contribution made by the Group
into the scheme in December 2010.
The Board
During 2010, Neil Cooper, the Group Finance Director, left the
Group in order to take up the position of Group Finance Director at
William Hill PLC. The Board would like to thank Neil for his
significant contribution to the Board and to the robust performance
achieved by the Group through an extremely challenging period. The
Board would also like to thank Lesley MacDonagh, who stepped down
as a non executive director at the last AGM, for her contribution
to the success of the Group since 2003.
On 23 August 2010 Jonathan Hill joined as Group Finance Director
and became a member of the Board on that date. Jonathan joined
Bovis Homes from TUI Travel Group and brings considerable
experience and expertise to his new role.
Net assets
Net assets per share as at 31 December 2010 was 533p as compared
to 520p at 31 December 2009.
Analysis of net assets
2010 2009
GBPm GBPm
--------------------------------- ------ -----
Net assets at 1 January 692.6 632.3
Pre-exceptional profit after
tax for the year 14.0 5.5
Exceptional charges net of
tax - (2.0)
Share capital issued 0.3 59.1
Net actuarial movement on
pension scheme through reserves 3.0 (3.0)
Deferred tax recognised on
share based payments (0.2) -
Current tax recognised on
share based payments 0.2 -
Adjustment to reserves for
share based payments 0.9 0.7
Net assets at 31 December 710.8 692.6
---------------------------------- ----- -----
Land
The Group has been successful with land investment in 2010 with
the addition of c3,700 high quality consented plots to the land
bank at a cost of GBP203 million. Approximately 80% of these plots
are located in the south of England. These plots have an estimated
future revenue of GBP711 million and an estimated future gross
profit potential of GBP181 million based on current sales prices
and current build costs, delivering an estimated future gross
margin of over 25%. Of the plots added to the consented land bank,
822 plots were delivered through conversion of strategic land.
The Group held a consented land bank of 13,766 plots at 31
December 2010, an increase of 1,724 plots from 12,042 plots held at
31 December 2009. Of the 13,766 plots, 69% are located in the south
of England, where the housing market continues to show greater
robustness. At the year end, the consented land bank included 3,931
consented plots which have been acquired since the nadir of house
prices in the current downturn. The Group estimates that the gross
profit potential on the plots within the consented land bank at the
2010 year end, based on current sales prices and current build
costs, has increased to GBP461 million with a gross margin of
20.0%, compared to the position at 30 June 2010, when the gross
profit potential was GBP412 million with a gross margin of 19.2%.
The increase of GBP49 million demonstrates the contribution to the
Group's future profits from its recent land acquisitions.
The average consented land plot cost at the start of 2010 was
GBP35,200. This has increased over the year to GBP41,000 at 31
December 2010 as a result of a lower number of written down plots
held in the land bank at the end of the year (26% of land plots
versus 36% at the start of the year) and the addition of new prime
southern traditional housing sites where the average plot cost is
higher.
As at 31 December 2010, the Group had agreed terms for the
acquisition of an additional c2,500 plots. Of these, 875 plots have
been acquired since the year end at a cost of GBP57 million and
with a gross profit potential of GBP51 million, based on current
sales prices and current build costs, delivering a gross margin of
over 25%.
Looking forward, the Group's strong balance sheet, with net cash
as at 31 December 2010 of GBP52 million, together with the Group's
existing GBP150 million committed bank facility, provides it with
the ability to continue its land investment strategy. Further, the
Group anticipates selectively selling some of its consented land,
particularly on those sites which have a longer trade out period by
virtue of their size. This will assist in the funding of new land
acquisitions and will improve the spread of the Group's land bank,
which will enhance capital turn and increase return on capital
employed in the future.
The further execution of the Group's land strategy will support
the Group in achieving its medium term aspiration of operating from
over 100 active sales outlets with consequential growth in volumes
and profit margins, based on current market conditions, and thus
materially improving shareholder returns.
The strategic land bank at 31 December 2010 amounted to 17,325
potential plots as compared to 16,363 potential plots at 31
December 2009. The Group added c1,800 potential plots to the
strategic land bank during 2010, thus enabling the strategic land
bank to grow in size notwithstanding the successful conversion of
over 800 plots into the consented land bank. The Group has for a
long time recognised the potential of strategic land investment
and, as visibility over the effects of the changes to the planning
environment improves, the Group intends to increase its investment
in strategic land.
Market conditions
The housing market continued to suffer in 2010 from a lack of
mortgage availability at the level of loan to value ratios required
by first time buyers, which has constrained demand for new build
homes, many of which are small and affordable, targeted at the
first time buyer market. Monthly mortgage approval levels appear to
have stabilised during 2010, but at levels representative of less
than half of a normal market. In tackling the issue of the lack of
availability of high loan to value mortgages, the Group has
launched Perfect 10, a 90% loan to value mortgage product with
Barclays Bank, exclusive to the Group. The Group will continue to
find innovative ways to enable its customers to access appropriate
mortgage finance.
After having made some positive progress in H1 2010, sales
prices stabilised during H2 2010. Although the market remains
challenging and customer confidence and commitment levels remain
subdued, the Group currently believes that the pricing environment
will be stable for 2011 as a whole. A limited supply of homes for
sale will not satisfy demand from purchasers. However, buyers are
likely to remain constrained by mortgage availability and continue
to struggle to raise finance. It is anticipated that sales prices
will be more robust in the south of England compared to the north
of England, which will assist the Group given its southern bias of
sites.
Current Trading
The Group entered 2011 with a forward sales order position of
420 homes for 2011 delivery. The forward sales position at the
start of 2010 was 643 homes, including the non-recurring sale of
215 homes sold to the joint venture. Excluding this from the
comparative, the 2011 forward sales position was consistent with
the prior year, notwithstanding the lower number of active outlets:
66 on average during 2010 versus 85 on average during 2009.
The Group has made an encouraging start to trading in the first
nine weeks of 2011. Sales enquiries and site visitors in the period
to 4 March 2011 have increased by 24% and 28% respectively,
compared to the same period in 2010 from a similar number of sales
outlets. From these enhanced visitor levels, the Group achieved an
average private sales rate of 0.45 net reservations per site per
week, compared with an average in the first nine weeks of 2010 of
0.41 and an average of 0.36 during H2 2010. The Group has achieved
268 net private reservations in the first nine weeks of 2011
against 242 net private reservations in the comparative period in
2010, an increase of 11%. Pricing has been stable, consistent with
levels achieved in the second half of 2010.
As at 4 March 2011, the Group held 715 net sales for legal
completion in 2011, as compared to 969 net sales at the same point
in 2010. Within the current year total, private sales amount to 469
units (2010: 701 units) and social sales amount to 246 units (2010:
268 units).
Outlook
As a result of the investment in land in 2010, the Group expects
to launch 33 new sales outlets during 2011, 23 of which are
expected to open in the first half of the year. Taking into account
21 sales outlets which are expected to close through the year, it
is anticipated that the Group will trade from an average of 76
sales outlets in 2011 versus 66 sales outlets in 2009, an increase
of 15%.
Given the focus on acquiring land in the south of England, it is
anticipated that two thirds of the active sales outlets at the end
of the 2011 will be southern located versus just over half of the
active sales outlets at the start of the year. As new sales outlets
are opened by the Group, absolute weekly reservation levels are
anticipated to increase and the sales rates on new predominantly
southern sites are expected to be stronger than the Group's recent
weekly average sales rate. This will contribute to improvements in
both volumes and profit margins.
The Group is strongly placed with the financial capability to
continue its consented land acquisition strategy, enabling it to
grow its output capacity. In 2010 the Group's strategic priority
was clear: invest in new land to generate strong outlet growth. The
strategic priorities for 2011 are equally clear: open the recently
acquired sites quickly, acquire more land, and drive improved
efficiency within the Group's capital employed. This will be
assisted by selectively selling consented land on some of the
Group's larger sites, thus contributing to the funding of new land
acquisitions. The resulting improved spread of land assets will
lead to the increase in active sales outlets, which will deliver
increased volumes, without relying on improving conditions in the
housing market, thus increasing revenue, profit and returns in the
mid term.
The Board is confident about the Group's prospects for 2011,
assuming a continuation of current market conditions, and continues
to believe that the growth strategy will materially improve
shareholder returns.
Bovis Homes Group PLC Group income statement
For the year ended
31 December 2010 2009
-------------------------------------
Before
exceptional Exceptional
items items
GBP000 GBP000 GBP000 GBP000
---------------------- -------- ------------ ----------- ---------
Revenue 298,635 281,505 - 281,505
Cost of sales (245,218) (236,339) 1,471 (234,868)
----------------------- -------- ------------ ----------- ---------
Gross profit 53,417 45,166 1,471 46,637
Administrative expenses (31,784) (27,769) - (27,769)
----------------------- -------- ------------ ----------- ---------
Operating profit
before financing
costs 21,633 17,397 1,471 18,868
Financial income 2,406 2,304 - 2,304
Financial expenses (5,614) (12,178) (4,197) (16,375)
----------------------- -------- ------------ ----------- ---------
Net financing costs (3,208) (9,874) (4,197) (14,071)
Share of profit of
joint venture 76 - - -
Profit/(loss) before
tax 18,501 7,523 (2,726) 4,797
Income tax
(expense)/credit (4,463) (2,070) 763 (1,307)
----------------------- -------- ------------ ----------- ---------
Profit/(loss) for the
period attributable to
equity holders of the
parent 14,038 5,453 (1,963) 3,490
----------------------- -------- ------------ ----------- ---------
Earnings/(loss) per
share
----------------------- -------- ------------ ----------- ---------
Basic 10.6p 4.4p (1.6p) 2.8p
Diluted 10.6p 4.4p (1.6p) 2.8p
----------------------- -------- ------------ ----------- ---------
Bovis Homes Group PLC
Group statement of comprehensive income
For the year ended 31 December
2010 2009
GBP000 GBP000
------------------------------------ ------ ------
Profit for the period 14,038 3,490
Actuarial gains / (losses)
on defined benefit pension
scheme 4,320 (4,210)
Deferred tax on actuarial movements
on defined benefit pension scheme (1,255) 1,179
Total comprehensive income
for the period attributable
to equity holders of the parent 17,103 459
------------------------------------- ------ ------
Bovis Homes Group PLC
Group balance sheet
At 31 December 2010 2009
GBP000 GBP000
----------------------------------------------- ------- -------
Assets
Property, plant and equipment 11,307 11,574
Investments 4,847 22
Restricted cash 138 -
Deferred tax assets 3,899 6,446
Trade and other receivables 12,087 2,213
Available for sale financial assets 31,147 21,291
Total non-current assets 63,425 41,546
----------------------------------------------- ------- -------
Inventories 764,360 630,709
Trade and other receivables 37,271 30,771
Cash and cash equivalents 67,003 114,595
Current tax assets - 831
----------------------------------------------- ------- -------
Total current assets 868,634 776,906
----------------------------------------------- ------- -------
Total assets 932,059 818,452
----------------------------------------------- ------- -------
Equity
Issued capital 66,609 66,570
Share premium 210,409 210,181
Retained earnings 433,799 415,815
----------------------------------------------- ------- -------
Total equity attributable to equity holders of
the parent 710,817 692,566
----------------------------------------------- ------- -------
Liabilities
Bank and other loans 15,233 2,337
Other financial liabilities 2,686 -
Trade and other payables 56,004 23,077
Retirement benefit obligations 2,870 8,910
Provisions 1,995 1,700
----------------------------------------------- ------- -------
Total non-current liabilities 78,788 36,024
----------------------------------------------- ------- -------
Bank and other loans 92 -
Trade and other payables 139,215 87,698
Provisions 1,604 2,164
Current tax liabilities 1,543 -
Total current liabilities 142,454 89,862
----------------------------------------------- ------- -------
Total liabilities 221,242 125,886
----------------------------------------------- ------- -------
Total equity and liabilities 932,059 818,452
----------------------------------------------- ------- -------
These accounts were approved by the Board of directors on 11
March 2011.
Bovis Homes Group PLC
Group statement of changes in equity
Total Issued Share Total
For the year ended retained
31 December earnings capital premium
GBP000 GBP000 GBP000 GBP000
----------------------- --------- ------- ------- -------
Balance at 1 January
2009 414,654 60,497 157,127 632,278
Total comprehensive
income and expense 459 - - 459
Deferred tax on other
employee benefits (2) - - (2)
Issue of share capital - 6,073 53,054 59,127
Share based payments 704 - - 704
Balance at 31 December
2009 415,815 66,570 210,181 692,566
----------------------- --------- ------- ------- -------
Balance at 1 January
2010 415,815 66,570 210,181 692,566
Total comprehensive
income and expense 17,103 - - 17,103
Deferred tax on other
employee benefits 36 - - 36
Issue of share capital - 39 228 267
Share based payments 845 - - 845
Deferred tax on share
based payments (160) - - (160)
Current tax on share
based payments 160 - - 160
Balance at 31 December
2010 433,799 66,609 210,409 710,817
----------------------- --------- ------- ------- -------
Bovis Homes Group PLC
Group statement of cash flows
For
the
year
ended
31
December 2010 2009
GBP000 GBP000
--------------- -------- --------
Cash
flows
from
operating
activities
Profit
for
the
year 14,038 3,490
Depreciation 636 769
Adjustment
for
sale
of
assets
to
joint
venture 963 -
Impairment
of
available
for
sale
assets 713 245
Financial
income (2,406) (2,304)
Financial
expense 5,614 16,375
Loss
on
sale
of
property,
plant
and
equipment 8 3
Equity-settled
share-based
payment
expense 845 704
Income
tax
expense 4,463 1,307
Share
of
result
of
joint
venture (76) -
Release
of
inventory
provisions - (2,664)
Increase
in
trade
and
other
receivables (23,951) (7,555)
(Increase)
/
decrease
in
inventories (133,650) 152,762
Increase
/
(decrease)
in
trade
and
other
payables 84,335 (17,173)
Decrease
in
provisions
and
employee
benefits (1,731) (611)
--------------- -------- --------
Cash
(outflow)
/
inflow
generated
from
operations (50,199) 145,348
--------------- -------- --------
Interest
paid (3,028) (6,684)
Income
taxes
(paid)
/
received (762) 21,688
--------------- -------- --------
Net
cash
(outflow)
/
inflow
from
operating
activities (53,989) 160,352
--------------- -------- --------
Cash
flows
from
investing
activities
Interest
received 660 1,481
Acquisition
of
property,
plant
and
equipment (402) (44)
Proceeds
from
sale
of
plant
and
equipment 24 45
Investment
in
joint
venture (4,228) -
Movements
in
loans
with
joint
venture (1,451) -
Investment
in
restricted
cash (138) -
Net
cash
(outflow)
/
inflow
from
investing
activities (5,535) 1,482
--------------- -------- --------
Cash
flows
from
financing
activities
Proceeds
from
the
issue
of
share
capital 267 60,662
Costs
associated
with
share
placing - (1,535)
Drawdown
/
(repayment)
of
borrowings 13,706 (118,000)
Costs
associated
with
refinancing (2,041) -
Net
cash
inflow
/
(outflow)
from
financing
activities 11,932 (58,873)
--------------- -------- --------
Net
(decrease)
/
increase
in
cash
and
cash
equivalents (47,592) 102,961
Cash
and
cash
equivalents
at
1
January 114,595 11,634
--------------- -------- --------
Cash
and
cash
equivalents
at
31
December 67,003 114,595
--------------- -------- --------
Notes to the accounts
1 Basis of preparation
Bovis Homes Group PLC ('the Company') is a company domiciled in
the United Kingdom. The consolidated financial statements of the
Company for the year ended 31 December 2010 comprise the Company
and its subsidiaries (together referred to as 'the Group') and the
Group's interest in associates.
The consolidated financial statements were authorised for issue
by the directors on 11 March 2011. The accounts were audited by
KPMG Audit Plc.
The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 December 2010
or 2009 but is derived from those accounts. Statutory accounts for
2009 have been delivered to the registrar of companies, and those
for 2010 will be delivered in due course. The auditors have
reported on those accounts; their reports were (i) unqualified,
(ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their
report and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
The consolidated financials statements have been prepared in
accordance with IFRS as adopted by the EU, and the accounting
policies have been applied consistently for all periods presented
in the consolidated financial statements.
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates. 2 Basis of consolidation
The consolidated financial statements incorporate the accounts
of the Company and entities controlled by the Company (its
subsidiaries) made up to 31 December. Control is achieved where the
Company has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities.
The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing
whether the Group controls another entity.
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
policies. The consolidated financial statements include the Group's
share of the total recognised gains and losses of associates on an
equity accounted basis, from the date that significant influence
commences until the date that significant influence ceases.
Entities which are controlled with another party or parties
("joint ventures") are accounted for using the equity method of
accounting. The results attributable to the Group's holding in
joint ventures are shown separately in the consolidated income
statement. The amount included in the consolidated balance sheet is
the Group's share of the net assets of the joint ventures plus net
loans receivable.
3 Accounting policies
There have been no changes to the Group's accounting policies.
These accounting policies will be disclosed in full within the
Group's forthcoming financial statements.
Notes to the accounts (cont)
4 Exceptional items Inventory carrying value
The Group has reviewed the carrying value of its inventory items
at the reporting date, comparing the carrying cost of the asset
against estimates of net realisable value. Net realisable value has
been arrived at using the Board's estimates of achievable sales
prices taking into account current market conditions, and after
deduction of an appropriate amount for selling costs. This has
given rise to no exceptional items relating to the carrying value
of inventory as at 31 December 2010 (2009: GBP2.7 million net
release).
Financing charge
There was no charge in 2010 (2009: GBP4.2 million).
Other exceptional items
There was no charge in 2010 (2009: GBP1.2 million).
In total there were no exceptional charges or releases for 2010
(2009 exceptional charge: GBP2.7 million).
5 Reconciliation of net cash flow to net cash
2010 2009
GBP000 GBP000
---------------------------------- ------- --------
Net (decrease) / increase
in net cash and cash equivalents (47,592) 102,961
(Drawdown) / repayment of
borrowings (13,706) 118,000
Fair value adjustments to
interest rate swaps 245 (337)
Fair value adjustment to
interest free loans 473 -
Movement in financing costs
included in loans - (8,270)
Net cash / (debt) at start
of period 112,258 (100,096)
---------------------------------- ------- --------
Net cash at end of period 51,678 112,258
---------------------------------- ------- --------
Analysis of net cash:
Cash and cash equivalents 67,003 114,595
Unsecured loans (15,233) (2,000)
Fair value of interest rate
swaps (92) (337)
Net cash 51,678 112,258
---------------------------------- ------- --------
6 Income taxes
Current tax
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, calculated using a corporation
tax rate of 28.0% applied to the pre-tax income or loss, adjusted
to take account of deferred taxation movements and any adjustments
to tax payable for previous years. Current tax receivable for
current and prior years is classified as a current asset.
Notes to the accounts (cont)
7 Dividends
There were no dividends paid in the current or prior year by the
Group. The Board has decided to propose a full year dividend of
3.0p per share in respect of 2010.
8 Earnings or Loss per share
Basic earnings per share
The calculation of basic earnings per share at 31 December 2010
was based on the profit attributable to ordinary shareholders of
GBP14,038,000 (2009: GBP3,490,000) and a weighted average number of
ordinary shares outstanding during the year ended 31 December 2010
of 132,664,656 (2009: 124,179,686), calculated as follows:
Profit attributable to ordinary shareholders
2010 2009
GBP000 GBP000
------------------------------------ ------- -------
Profit for the period attributable
to ordinary shareholders 14,038 3,490
Weighted average number of ordinary shares
2010 2009
---------------------------- ------------ ------------
Issued ordinary shares at
1 January 133,138,968 120,994,753
Effect of own shares held (528,808) (621,297)
Effect of shares issued in
year 54,496 3,806,230
---------------------------- ------------ ------------
Weighted average number of
ordinary shares at
31 December 132,664,656 124,179,686
---------------------------- ------------ ------------
Basic earnings per ordinary share before exceptional items for
the year ended 31 December 2009 was calculated on the
pre-exceptional profit after tax of GBP5,453,000. Basic loss per
share on exceptional items for the year ended 31 December 2009 was
calculated on the exceptional loss after tax of GBP1,963,000. In
both cases this is expressed on a per share basis using the
weighted average share information disclosed above.
Diluted earnings per share
The calculation of diluted earnings per share at 31 December
2010 was based on the profit attributable to ordinary shareholders
of GBP14,038,000 (2009: GBP3,490,000) and a weighted average number
of ordinary shares outstanding during the year ended 31 December
2010 of 132,685,679 (2009: 124,203,192).
Under normal circumstances, the average number of shares is
diluted in reference to the average number of potential ordinary
shares held under option during the period. This dilutive effect
amounts to the number of ordinary shares which would be purchased
using the aggregate difference in value between the market value of
shares and the share option exercise price. The market value of
shares has been calculated using the average ordinary share price
during the period. Only share options which have met their
cumulative performance criteria have been included in the dilution
calculation.
However, as a loss per share cannot be reduced through dilution,
this dilution adjustment has not been applied to the calculation of
diluted loss per share arising from exceptional items in 2009. This
dilution adjustment has been applied to the calculation of diluted
earnings per share before exceptional items and diluted earnings
per share after exceptional items for 2009.
Notes to the accounts (cont)
The calculation of diluted loss on exceptional items per share
at 31 December 2009 was based on the exceptional loss attributable
to ordinary shareholders of GBP1,963,000 and a weighted average
number of ordinary shares outstanding during the year ended 31
December 2009 of 124,179,686.
Weighted average number of ordinary shares (diluted)
2010 2009
--------------------------------- ------------ ------------
Weighted average number of
ordinary shares at 31 December 132,664,656 124,179,686
Effect of share options in
issue which have a dilutive
effect 21,023 23,506
--------------------------------- ------------ ------------
Weighted average number of
ordinary shares (diluted) at
31 December 132,685,679 124,203,192
--------------------------------- ------------ ------------
Diluted earnings before exceptional items
Diluted earnings per ordinary share before exceptional items for
the year ended 31 December 2009 is calculated on the
pre-exceptional profit after tax of GBP5,453,000 and a weighted
average number of ordinary shares outstanding during the year ended
31 December 2009 of 124,203,192.
9 Circulation to shareholders
The consolidated financial statements will be sent to
shareholders on or about 6 April 2011. Further copies will be
available on request from the Company Secretary, Bovis Homes Group
PLC, The Manor House, North Ash Road, New Ash Green, Longfield,
Kent DA3 8HQ.
Further information on Bovis Homes Group PLC can be found on the
Group's corporate website www.bovishomesgroup.co.uk, including the
slide presentation document which will be presented at the Group's
results meeting on 14 March 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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