TIDMBVS
RNS Number : 1300Y
Bovis Homes Group PLC
27 February 2012
27 February 2012
BOVIS HOMES GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011
STRONG IMPROVEMENT IN PROFITS: POSITIONED FOR SIGNIFICANT GROWTH
IN RETURNS
Bovis Homes Group PLC today announced its preliminary results
for the financial year ended 31 December 2011 which have been
prepared in accordance with International Financial Reporting
Standards as adopted by the EU ('IFRS').
Financial highlights 2011 2010 Change
Revenue GBP364.8m GBP298.6m +22%
Gross profit GBP72.2m GBP53.4m +35%
Housing gross margin * 20.8% 17.9% +2.9ppts
Operating profit GBP36.4m GBP21.6m +69%
Operating margin 10.0% 7.2% +2.8ppts
Profit before tax GBP32.1m GBP18.5m +74%
Earnings per share 17.5p 10.6p +65%
Dividend per share 5.0p 3.0p +67%
Net cash GBP50.8m GBP51.7m
* excluding land sales
Operational highlights
-- Legal completions of 2,045 homes (2010: 1,901), an increase of 8%
-- Average private sales price of GBP180,100 (2010: GBP172,300), an increase of 5%
-- 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 GBP524 million, calculated using current sales
prices and current build costs (31 December 2010: 13,766 plots with
gross profit potential of GBP461 million)
-- 18,749 potential plots of strategic land (2010: 17,325 potential plots)
Current trading and outlook
-- 2012 private reservations to date increased by 41% from a 28%
increase in active sales outlets and a sales rate improvement of
10%
-- Sales prices achieved to date have been modestly ahead of Group expectations
-- On track for an average of 85 active sales outlets for 2012 (2011: 73)
-- Terms agreed to acquire over 2,000 plots of land; circa 750
consented plots at an advanced stage of acquisition and circa 500
plots contracted, subject to planning, with legal completion
expected in 2012
-- Assuming current market conditions continue, the Group
anticipates achieving a return on capital employed of at least 7%
in 2012
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 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.
"Significant progress has also been made in positioning the
Group for continued improving returns. The substantial land
investment in recent years will deliver a strong increase in active
sales outlets in 2012. Based on a continuation of current market
conditions, this will further enhance volumes, sales prices and
profit margins.
"As well as driving profitability, the Group is focused on
enhancing shareholder returns through improving the efficiency of
its capital employed, through land bank management, including the
sale of consented plots on selected sites, and by managing working
capital tightly.
"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.
"I would like to recognise the considerable effort, commitment
and hard work of our employees during 2011 and to thank them all
for their contribution to the Group's success."
Enquiries: David Ritchie, Chief Results issued Andrew Jaques/Reg
Executive by Hoare/
Jonathan Hill, Finance James White
Director
Bovis Homes Group PLC MHP Communications
On 27 February - On 27 February -
tel: 07855 432 699 tel: 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.
Chief Executive's Statement
Bovis Homes has made significant progress in 2011, delivering a
strong improvement in profits and earnings against a backdrop of
challenging, but stable, market conditions.
The Group has continued to position itself for significant
improvement in returns through the continued acquisition of high
quality consented sites in order to grow active sales outlets,
leading to higher volumes, increased average sales price and higher
profit margins.
Additionally, the Group has taken steps to improve the
efficiency of capital employed, both through the sale of consented
plots on selected sites and by managing working capital
tightly.
Bovis Homes aims to be a quality housebuilder delivering high
returns generated from a strong land bank, much of it strategically
sourced, and a quality product sold at a premium price. In order to
deliver improved returns, the following clear strategic objectives
for 2011 were set out and have been delivered:
-- Increase operating profits
-- Build future margin potential in the land bank
-- Improve efficiency of capital employed
Increase operating profits
Operating profit increased in the year by 69% to GBP36.4
million. This resulted from the compound positive effect of an
increased volume of legal completions at a higher average sales
price with an improved profit margin.
Volume growth was driven from the increased number of active
sales outlets in 2011. Having opened 33 sales outlets during the
year, the average number of active sales outlets grew to 73 from 66
in the prior year and the Group finished 2011 with 80 active sales
outlets.
The increase in active sales outlets contributed to the delivery
of 2,045 legal completions during 2011, 8% ahead of the previous
year (2010: 1,901). The Group legally completed 1,624 private homes
(2010: 1,592, including the 215 home joint venture deal), with an
underlying increase, excluding the joint venture deal, of 18%. As a
result of the quantity of new site openings during the year, legal
completions of social homes increased by 36% to 421 (2010: 309),
21% of total volume, compared to 16% in 2010.
In addition to increased volume, the Group's average sales price
also increased. The average sales price of private homes was 5%
higher at GBP180,100 in 2011 (2010: GBP172,300). This uplift was
almost entirely due to the mix of homes as the Group increased the
contribution from family homes in the south of England. Taking
private and social homes together, the overall average sales price
in 2011 was GBP162,400 (2010: GBP160,700).
Gross profit margin (excluding land sales) increased to 20.8% in
2011 from 17.9% in 2010. This resulted from two factors: the full
year benefit of construction cost savings in 2011 and the increased
contribution from legal completions on stronger profit margin sites
acquired post the housing market downturn.
As a result of the compound positive effect of volume growth,
higher average sales price and improved gross profit margin, gross
profit (excluding land sales) increased by 30% to GBP69.5 million.
Combined with land sales profits of GBP2.7 million and with
overheads well controlled, the significant growth in operating
profit to GBP36.4 million (2010: GBP21.6m) was achieved at an
operating margin of 10% (2010: 7.2%).
Build future margin potential in the land bank
During 2011, 2,552 plots were added to the consented land bank
at a cost of GBP134 million (2010: 3,690 consented plots at a cost
of GBP203 million). Approximately 88% of these plots are located in
the south of England, where the housing market continues to show
greater robustness. The plots added have an estimated future
revenue of GBP542 million and an estimated future gross profit
potential of GBP137 million, based on current sales prices and
current build costs, and are expected to deliver an estimated gross
margin of over 25%. Of the plots added to the consented land bank,
circa 1,000 plots were delivered through conversion of strategic
land.
The Group has agreed terms for the acquisition of more than
2,000 further plots. Of these, circa 750 consented plots on five
sites are at an advanced stage in the acquisition process with a
targeted acquisition date in H1 2012. An additional circa 500 plots
on five sites are contracted, subject to planning, with planning
expected in 2012.
The consented land bank amounted to 13,723 plots as at 31
December 2011, marginally below the 13,766 plots held at 31
December 2010. The Group estimates that the gross profit potential
on the plots within the consented land bank at the 2011 year end,
based on current sales prices and current build costs, was GBP524
million with a gross margin of 21.4% (31 December 2010: gross
profit potential of GBP461 million with a gross margin of 20.0%).
The increase in 2011 of GBP63 million arose from the land additions
(GBP137 million) less utilisation from home sales (GBP69 million)
and land sales (GBP26 million). The balancing positive value of
GBP21 million reflects other added value changes delivered by the
Group in respect of improving gross profit, including cost savings
and site replans.
Of the 13,723 plots, 72% are located in the south of England
(2010: 69%). At the year end, the consented land bank included
5,797 consented plots (42% of total), which have been acquired
since the housing market downturn (2010: 3,931, 29% of total). The
average consented land plot cost was GBP39,800 at the start of 2011
and increased over the year to GBP42,100, as a result of a lower
number of written down plots held in the land bank (17% of land
plots versus 26% at the start of the year) and the addition of new
prime southern traditional housing sites where the average plot
cost is higher.
The Group intends to increase its investment in strategic land
as visibility over the effects of the changes to the planning
environment improves. The strategic land bank at 31 December 2011
stood at 18,749 potential plots as compared to 17,325 potential
plots at 31 December 2010. The Group added circa 2,400 potential
plots to the strategic land bank during the year, thus enabling the
strategic land bank to grow in size notwithstanding the successful
conversion of circa 1,000 plots into the consented land bank.
Improve efficiency of capital employed
The Group has controlled the size and value of the consented
land bank during 2011, with a lower number of plots being acquired
than in 2010, whilst legal completions have increased and a number
of land sales have been successfully delivered. At the same time
the Group is increasing the number of active sales outlets, thus
employing its capital more effectively.
In order to improve the spread of the Group's land bank to
enhance capital turn, the Group has achieved its five targeted
consented land sales on selected sites in 2011, particularly on
those sites which have a longer trade out period by virtue of their
size. Of these, four land sales completed in 2011 and the fifth
completed in early January 2012. As a result of the four completed
sales, the land bank reduced in size by 532 consented plots.
The Group has tightly controlled work in progress, with the
number of units of production held at the end of 2011 reduced to
949 units (2010: 1,093). Additionally, work in progress associated
with infrastructure, roads and sewers has been reduced.
Improving returns
Strong growth in profits during 2011 combined with improved
efficiency of capital employed has resulted in a significant
increase in return on capital employed to 5% in 2011 from 3% in
2010.
The Group is firmly of the view that, based on current market
conditions continuing, return on capital employed will further
improve in 2012, fuelled by the aforementioned compound positive
effect on profit of volume improvement, growth in average sales
price and increase in profit margin. Whilst future output capacity
will grow, the capital base will remain tightly controlled in
respect of land and work in progress. Therefore, assuming current
market conditions continue, the Group anticipates achieving a
return on capital employed of at least 7% in 2012.
Market conditions
A lack of availability in 2011 of high loan to value mortgage
products continued to constrain market demand for new build homes.
This was particularly an issue for first time buyers, who, since
the financial crisis, have had to provide a higher level of deposit
for their home purchase than had historically been the case.
Monthly mortgage approval levels have been stable throughout 2011,
but at significantly lower levels than the position
historically.
With a backdrop of continuing economic and employment
uncertainty, trading conditions are expected to remain challenging
during 2012. However, the Group regards positively the anticipated
launch of the Government backed mortgage indemnity scheme and
welcomes the stimulus that this scheme can provide to activity in
the new build homes market through the availability of 95% loan to
value mortgages. The mortgage indemnity scheme is expected to work
in a similar way to the Group's existing Perfect 10 product and the
Group will work with the industry, lenders and the Government with
the aim of launching the new scheme in good time for the spring
market this year. As well as working with the industry, the Group
will continue to seek innovative ways to enable its customers to
access appropriate mortgage finance.
During 2011, sales prices have been stable with some regional
variations. Although the market remains challenging and customer
confidence and commitment levels remain subdued, the Group
currently believes that the pricing environment will be broadly
stable for 2012 as a whole, on the expectation that a limited
supply of homes for sale will not satisfy demand from purchasers.
At the same time, buyers are likely to remain constrained by
mortgage availability. It is anticipated that sales prices will
continue to be more robust in the south of England than in the
north, which will assist the Group given the southern bias of its
sites.
Current trading
The Group entered 2012 with a forward sales order position of
568 homes, a 35% improvement on the 420 homes brought forward at
the start of 2011. This improvement was contributed to by the
increase in average active sales outlets to 73 in 2011 from 66
during 2010.
Active sales outlets were 83 in the eight weeks to 24 February
2012, up by 28% from 65 in the same period in 2011. This increase
has been instrumental in delivering the robust trading achieved in
the period to 24 February 2012, with sales enquiries and site
visitors higher by 26% and 32% respectively. From these enhanced
visitor levels, the Group has achieved 320 net private reservations
in the first eight weeks of 2012 against 227 in the comparative
period in 2011, an increase of 41%. The average private sales rate
was 0.48 net reservations per site per week, an improvement of 10%
on the sales rate of 0.44 in the same period in 2011. Sales prices
achieved to date have been modestly ahead of Group
expectations.
As at 24 February 2012, the Group held 926 net sales for legal
completion in 2012, as compared to 647 net sales at the same point
in 2011, an increase of 43%. Of these, private sales amounted to
550 units (2011: 428 units) and social housing sales amounted to
376 units (2011: 219 units).
Outlook
As a result of the robust investment in land in 2010 and 2011,
the Group expects to trade from an average of 85 sales outlets in
2012 versus 73 in 2011, an increase of 16%. Given the focus on
acquiring land in the south of England, it is anticipated that 75%
of the active sales outlets at the end of the 2012 will be southern
located versus 60% at the start of 2012. As new sales outlets are
opened by the Group, absolute weekly reservation levels are
anticipated to increase.
The continued growth in active sales outlets should, based on
stable market conditions, enable the Group to deliver increased
volumes, at a higher average sales price with improved profit
margins. With a clear focus on controlling the capital employed of
the Group through rigorous management of the landbank and tight
control of work in progress, the Group expects to deliver a strong
improvement in returns in 2012 and beyond.
The Board is confident in the Group's prospects for 2012,
assuming a continuation of current market conditions. The Board
continues to believe that the Group's growth strategy will increase
profits, which, combined with improving capital efficiency, will
materially improve shareholder returns.
Financial Review
Revenue
During 2011, the Group generated total revenue of GBP364.8
million, 22% up on 2010 at GBP298.6 million. Housing revenue in
2011 was GBP332.1 million, 13% ahead of the prior year (2010:
GBP292.7 million). Other income was GBP2.7 million (2010: GBP5.9
million). Four land sales (representing 532 consented plots)
legally completed in 2011, with a total income of circa GBP38
million. With one of these land sales being a land swap, GBP30.0
million was recognised as revenue in 2011. There were no land sales
in 2010.
Operating profit
The Group delivered an operating profit for the year ended 31
December 2011 of GBP36.4 million at an operating margin of 10.0%,
as compared to GBP21.6 million in the previous year, at an
operating margin of 7.2%.
Gross margin (excluding land sales) increased to 20.8% in 2011
from 17.9% in 2010, with the gross margin (excluding land sales) in
H2 2011 increasing to 21.2% from 18.9% in H2 2010. The gross margin
benefited from the full year positive effect of construction cost
savings in 2011 combined with the increased contribution from legal
completions on sites acquired post housing market downturn. Subject
to current market conditions continuing, with an increasing
proportion of legal completions coming from sites acquired since
the housing market downturn, the gross margin achieved in 2011 can
be further improved in 2012. The profit on land sales was GBP2.7
million, a margin of 9.0%, which resulted in a total gross profit
of GBP72.2 million at a gross margin of 19.8%.
Overheads, including sales and marketing costs, increased in
2011 by 13%, as the Group invested to support the growing activity
levels. The overheads to revenue ratio improved to 9.8% in 2011
from 10.7% in 2010.
Profit before tax and earnings per share
The Group achieved a profit before tax of GBP32.1 million,
comprising operating profit of GBP36.4 million, net financing
charges of GBP4.5 million and a profit from the joint venture of
GBP0.2 million. This compares to GBP21.6 million of operating
profit, GBP3.2 million of net financing charges and a profit from
the joint venture of GBP0.1 million, which generated GBP18.5
million of profit before tax in 2010. Profit before tax increased
by 74%. Basic earnings per share for the year improved by 65% to
17.5p compared to 10.6p in 2010.
Financing
The Group incurred net financing charges of GBP4.5 million in
2011 (2010: GBP3.2 million). With a reduced average net cash
position (average net cash of GBP5 million during 2011, compared to
average net cash of GBP78 million in 2010), net bank charges for
2011 were GBP2.8 million (2010: GBP2.2 million), which included the
amortisation of arrangement fees (GBP0.8 million) and commitment
fee charges (GBP2.0 million). The Group incurred a GBP4.3 million
finance charge (2010: charge of GBP2.7 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 GBP0.6 million (2010: GBP0.2 million) net pension
financing credit during 2011, 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
GBP1.6 million (2010: GBP1.2 million) arising from the unwinding of
the discount on its available-for-sale financial assets during
2011. There were GBP0.4 million of other financing credits during
the year (2010: GBP0.3 million of other credits).
Taxation
The Group has recognised a tax charge of GBP8.8 million on
profit before tax of GBP32.1 million at an effective tax rate of
27.5% (2010: tax charge of GBP4.5 million at an effective rate of
24.1%). The effective rate is above the underlying rate, due to the
effects on the deferred tax asset of the reduction of the statutory
corporation tax rate. The prior year benefited from land
remediation allowances and the finalisation of prior years' tax
submissions. The Group has recognised a current tax liability of
GBP4.0 million in its closing balance sheet as at 31 December 2011
(2010: current tax liability of GBP1.5 million).
Dividends
In the light of the ongoing improvement in the performance of
the Group and the Board's confidence in the delivery of Group's
strategy, the Board has proposed a 2011 final dividend of 3.5p per
share. This dividend will be paid on 25 May 2012 to holders of
ordinary shares on the register at the close of business on 30
March 2012. The Board intends to offer a scrip dividend
alternative, pursuant to which the shareholders may elect to
receive the whole or part of their 2011 final dividend in new
ordinary shares credited as fully paid instead of cash.
Combined with the interim dividend paid of 1.5p, the dividend
for the full year totals 5.0p compared to a total of 3.0p paid in
2010, an increase of 67%. The Board expects to grow dividends
progressively as earnings per share increase.
Net assets
Net assets per share as at 31 December 2011 was 545p as compared
to 533p at 31 December 2010.
Analysis of net assets
2011 2010
GBPm GBPm
----------------------------------------- ------------ ------ ----- -----
Net assets at 1 January 710.8 692.6
Profit after tax for the year 23.3 14.0
Share capital issued 1.9 0.3
Net actuarial movement on pension scheme
through reserves (2.5) 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 1.1 0.9
Dividends paid to shareholders (6.0) -
-------------------------------------------------------- ----- ---- -----
Net assets at 31 December 728.6 710.8
-------------------------------------------------------- ----- ----- -----
Pensions
Taking into account the latest estimates provided by the Group's
actuarial advisors, the Group's pension scheme had a deficit of
GBP2.4 million at 31 December 2011, an improvement of GBP0.5
million on the opening deficit of GBP2.9 million at 31 December
2010. Scheme assets grew over the year to GBP76.7 million from
GBP73.5 million and the scheme liabilities increased to GBP79.1
million from GBP76.4 million. The increase in liabilities was
primarily a result of a fall in bond yields. Scheme assets
benefited from a GBP2.8 million special cash contribution made by
the Group into the scheme in July 2011.
Net cash and cashflow
Having started the year with a net cash balance of GBP51.7
million, the Group generated operating cash inflow pre land
expenditure of GBP114 million (2010: GBP93 million), demonstrating
the strong underlying cash generation from the Group's existing
assets. Net cash payments in 2011 for land investment were GBP96
million (2010: GBP137 million). Non-trading cash outflow was GBP19
million. As at 31 December 2011 the Group's net cash balance was
GBP50.8 million with GBP56.2 million of cash in hand, offset by
GBP5.0 million of loans received from the Government and GBP0.4
million representing the fair value of an interest rate swap. At
the end of the year, the Group had in place a GBP150 million
committed syndicated facility, maturing in September 2013, with
flexible borrowing terms at a low cost.
Bovis Homes Group PLC Group income statement
For the year ended 31 December 2011 2010
GBP000 GBP000
---------------------------------------- -------- --------
Revenue 364,782 298,635
Cost of sales (292,546) (245,218)
---------------------------------------- -------- --------
Gross profit 72,236 53,417
Administrative expenses (35,876) (31,784)
---------------------------------------- -------- --------
Operating profit before financing costs 36,360 21,633
Financial income 2,843 2,406
Financial expenses (7,349) (5,614)
---------------------------------------- -------- --------
Net financing costs (4,506) (3,208)
Share of profit of joint venture 243 76
Profit before tax 32,097 18,501
Income tax expense (8,831) (4,463)
---------------------------------------- -------- --------
Profit for the period attributable
to equity holders of the parent 23,266 14,038
---------------------------------------- -------- --------
Earnings per share
---------------------------------------- -------- --------
Basic 17.5p 10.6p
Diluted 17.5p 10.6p
---------------------------------------- -------- --------
Group statement of comprehensive income
For the year ended 31 December 2011 2010
GBP000 GBP000
------------------------------------------ ------ ------
Profit for the period 23,266 14,038
Actuarial (losses) / gains on defined
benefit pension scheme (3,390) 4,320
Deferred tax on actuarial movements on
defined benefit pension scheme 851 (1,255)
Total comprehensive income for the period
attributable to equity holders of the
parent 20,727 17,103
------------------------------------------ ------ ------
Bovis Homes Group PLC
Group balance sheet
At 31 December 2011 2010
GBP000 GBP000
------------------------------------ ------- -------
Assets
Property, plant and equipment 11,614 11,307
Investments 5,327 4,847
Restricted cash 659 138
Deferred tax assets 3,498 3,899
Trade and other receivables 2,017 12,087
Available for sale financial assets 38,653 31,147
Total non-current assets 61,768 63,425
------------------------------------ ------- -------
Inventories 797,756 764,360
Trade and other receivables 77,422 37,271
Cash and cash equivalents 56,177 67,003
Total current assets 931,355 868,634
------------------------------------ ------- -------
Total assets 993,123 932,059
------------------------------------ ------- -------
Equity
Issued capital 66,836 66,609
Share premium 212,064 210,409
Retained earnings 449,671 433,799
------------------------------------ ------- -------
Total equity attributable to equity
holders of the parent 728,571 710,817
------------------------------------ ------- -------
Liabilities
Bank and other loans 5,402 15,233
Other financial liabilities 1,243 2,686
Trade and other payables 45,451 56,004
Retirement benefit obligations 2,444 2,870
Provisions 1,776 1,995
------------------------------------ ------- -------
Total non-current liabilities 56,316 78,788
------------------------------------ ------- -------
Bank and other loans - 92
Trade and other payables 202,665 139,215
Provisions 1,535 1,604
Current tax liabilities 4,036 1,543
Total current liabilities 208,236 142,454
------------------------------------ ------- -------
Total liabilities 264,552 221,242
------------------------------------ ------- -------
Total equity and liabilities 993,123 932,059
------------------------------------ ------- -------
These financial statements were approved by the Board of
directors on 24 February 2012.
Bovis Homes Group PLC
Group statement of changes in equity
Total Issued Share Total
For the year ended 31 December retained capital premium
earnings
GBP000 GBP000 GBP000 GBP000
------------------------------- --------- ------- ------- -------
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
------------------------------- --------- ------- ------- -------
Balance at 1 January 2011 433,799 66,609 210,409 710,817
Total comprehensive income
and expense 20,727 - - 20,727
Issue of share capital - 227 1,655 1,882
Share based payments 1,121 - - 1,121
Dividends paid to shareholders (5,976) - - (5,976)
Balance at 31 December
2011 449,671 66,836 212,064 728,571
------------------------------- --------- ------- ------- -------
Bovis Homes Group PLC
Group statement of cash flows
For the year ended 31 December 2011 2010
GBP000 GBP000
--------------------------------------------- ------- --------
Cash flows from operating activities
Profit for the year 23,266 14,038
Depreciation 747 636
Adjustment for sale of assets to joint
venture 234 963
Impairment of available for sale assets 1,274 713
Financial income (2,843) (2,406)
Financial expense 7,349 5,614
(Profit) / loss on sale of property,
plant and equipment (33) 8
Equity-settled share-based payment expense 1,121 845
Income tax expense 8,831 4,463
Share of result of joint venture (243) (76)
Increase in trade and other receivables (37,951) (23,951)
Increase in inventories (33,396) (133,650)
Increase in trade and other payables 47,517 84,335
Decrease in provisions and retirement
benefit obligations (3,484) (1,731)
--------------------------------------------- ------- --------
Cash inflow / (outflow) generated from
operations 12,389 (50,199)
--------------------------------------------- ------- --------
Interest paid (2,311) (3,028)
Income taxes paid (5,085) (762)
--------------------------------------------- ------- --------
Net cash inflow / (outflow) from operating
activities 4,993 (53,989)
--------------------------------------------- ------- --------
Cash flows from investing activities
Interest received 420 660
Acquisition of property, plant and equipment (1,073) (402)
Proceeds from sale of plant and equipment 52 24
Investment in joint venture (500) (4,228)
Movements in loans with joint venture (125) (1,451)
Dividends received from joint venture 200 -
Investment in restricted cash (522) (138)
Net cash outflow from investing activities (1,548) (5,535)
--------------------------------------------- ------- --------
Cash flows from financing activities
Dividends paid (4,146) -
Proceeds from the issue of share capital 52 267
(Repayment) / drawdown of borrowings (10,177) 13,706
Costs associated with refinancing - (2,041)
Net cash (outflow) / inflow from financing
activities (14,271) 11,932
--------------------------------------------- ------- --------
Net decrease in cash and cash equivalents (10,826) (47,592)
Cash and cash equivalents at 1 January 67,003 114,595
--------------------------------------------- ------- --------
Cash and cash equivalents at 31 December 56,177 67,003
--------------------------------------------- ------- --------
Notes to the financial statements
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 2011 comprise the Company
and its subsidiaries (together referred to as 'the Group') and the
Group's interest in associates and joint ventures.
The consolidated financial statements were authorised for issue
by the directors on 24 February 2012. The financial statements were
audited by KPMG Audit Plc.
The financial information set out above does not constitute the
company's statutory financial statements for the years ended 31
December 2011 or 2010 but is derived from those financial
statements. Statutory financial statementsfor 2010 have been
delivered to the registrar of companies, and those for 2011 will be
delivered in due course. The auditors have reported on those
financial statements; 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 financial
statements 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. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the
date that control ceases.
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.
Joint ventures are those entities in which the Group has joint
control over the financial and operating policies. The consolidated
financial statements include the Group's share of the total
recognised gains and losses of joint ventures on an equity
accounted basis, from the date that joint control commenced until
joint control ceases.
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.
4 Reconciliation of net cash flow to net cash
2011 2010
GBP000 GBP000
------------------------------------- ------- -------
Net decrease in net cash and cash
equivalents (10,826) (47,592)
Repayment / (drawdown) of borrowings 10,177 (13,706)
Fair value adjustments to interest
rate swaps (315) 245
Fair value adjustment to interest
free loans 61 473
Net cash at start of period 51,678 112,258
------------------------------------- ------- -------
Net cash at end of period 50,775 51,678
------------------------------------- ------- -------
Analysis of net cash:
Cash and cash equivalents 56,177 67,003
Unsecured loans (4,995) (15,233)
Fair value of interest rate swaps (407) (92)
Net cash 50,775 51,678
------------------------------------- ------- -------
5 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 26.5% 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.
6 Dividends
The following dividends were declared by the Group:
2011 2010
GBP000 GBP000
Prior year final dividend per share
of 3.0p (2010: GBPnil) 3,982 -
Current year interim dividend per share
of 1.5p (2010: GBPnil) 1,994 -
---------------------------------------- ------ ------
Dividends declared 5,976 -
---------------------------------------- ------ ------
The Board has decided to propose a final dividend of 3.5p per
share in respect of 2011.
7 Earnings or Loss per share
Basic earnings per share
The calculation of basic earnings per share at 31 December 2011
was based on the profit attributable to ordinary shareholders of
GBP23,266,000 (2010: GBP14,038,000) and a weighted average number
of ordinary shares outstanding during the year ended 31 December
2011 of 132,860,480 (2010: 132,664,656), calculated as follows:
Profit attributable to ordinary shareholders
2011 2010
GBP000 GBP000
------------------------------------ ------- -------
Profit for the period attributable
to ordinary shareholders 23,266 14,038
Weighted average number of ordinary shares
2011 2010
------------------------------------- ------------ ------------
Issued ordinary shares at 1 January 133,218,325 133,138,968
Effect of own shares held (474,109) (528,808)
Effect of shares issued in year 116,264 54,496
------------------------------------- ------------ ------------
Weighted average number of ordinary
shares at 31 December 132,860,480 132,664,656
------------------------------------- ------------ ------------
Diluted earnings per share
The calculation of diluted earnings per share at 31 December
2011 was based on the profit attributable to ordinary shareholders
of GBP23,266,000 (20010: GBP14,038,000) and a weighted average
number of ordinary shares outstanding during the year ended 31
December 2011 of 132,944,264 (2010: 132,685,679).
The average number of shares is diluted by 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.
Weighted average number of ordinary shares (diluted)
2011 2010
-------------------------------------------- ------------ ------------
Weighted average number of ordinary shares
at 31 December 132,860,480 132,664,656
Effect of share options in issue which
have a dilutive effect 83,784 21,023
-------------------------------------------- ------------ ------------
Weighted average number of ordinary shares
(diluted) at 31 December 132,944,264 132,685,679
-------------------------------------------- ------------ ------------
8 Circulation to shareholders
The consolidated financial statements will be sent to
shareholders on or about 26 March 2012. 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 27 February 2012.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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