Interim Management Statement (4408D)
May 16 2012 - 1:01AM
UK Regulatory
TIDMBVS
RNS Number : 4408D
Bovis Homes Group PLC
16 May 2012
16 May 2012
Bovis Homes Group PLC
Interim Management Statement
Strong current trading with improving returns guidance
Bovis Homes Group PLC is holding its Annual General Meeting at
12.00pm today. This statement comments on the Group's current
trading and financial performance and provides guidance on the
outlook for the current financial year. In line with the
requirements of the UK Listing Authority's Disclosure and
Transparency Rules, this Interim Management Statement covers the
period from 1 January 2012 to the date of this statement.
Strategy
Market conditions remain stable in the UK housing market. Based
on these conditions continuing, the ongoing delivery of the Group's
growth strategy is expected to generate strongly improved returns.
Profits are expected to grow significantly from the compound
positive effect of:
-- increased legal completion volume from a greater number of
active sales outlets and stronger sales rates;
-- higher average sales price from an increased proportion of
sales of traditional homes on more southerly based sites; and
-- improved profit margins from an increased contribution from
sites acquired since the housing market downturn.
The Group is also maintaining rigorous control of capital
employed, which should lead to a strongly improving return on
capital employed.
As further evidence of the successful delivery of its strategy,
the Group is delighted to report the achievement of the maximum
five star rating in the most recently announced Home Builders
Federation's annual customer satisfaction survey.
Current trading
Trading in the 19 weeks to 11 May 2012 has been strong and the
Group has achieved 783 private net reservations (2011: 589), a 33%
increase year on year. This has been driven by a 23% increase in
the average number of active sales outlets to 82 (2011: 67), and a
9% improvement in the sales rate per sales outlet, with an average
private sales rate of 0.50 net reservations per week per sales
outlet (2011: 0.46). The number of visitors to the Group's sites
has also increased by 51% in the year to date compared to the same
period last year.
Having started 2012 with 230 forward sold private reservations,
as at 11 May 2012 the Group held 1,013 private reservations for
2012 legal completion (2011: 790). Including social housing units
expected to legally complete in 2012, at 11 May 2012 the Group held
a total sales position of 1,437 units which compares to 1,049 units
at the same point in 2011.
Sales prices achieved on reservations to date have been modestly
above management's expectations. The mix of homes has improved and
the Group therefore expects the average sales price in the half
year results to be ahead of the comparative period of 2011. These
mix improvements are anticipated to continue during the balance of
2012 which will lead to further increases in average sales price in
the second half year compared to the first half.
The profit margins on the reservations achieved to date have
shown improvement over the prior year, the increased contribution
from sites acquired since the housing market downturn delivering
the anticipated margin enhancement.
The Group welcomes the launch of the NewBuy mortgage product,
which enables customers to access 95% loan to value mortgages.
There has been strong interest in NewBuy since its launch and the
early signs are promising, however NewBuy's ongoing success relies
on the availability of mortgages with competitive interest
rates.
Land management
The Group has remained highly active in the land market and
currently has legal agreements in place to acquire 1,774 housing
plots on 14 sites. A number of these sites are being acquired on a
conditional basis where the Group's commitment to expenditure only
arises when the planning consent has been achieved, thus generating
a stronger return on capital employed. The Group anticipates
achieving planning consent on these conditionally acquired sites
during 2012. In addition, the Group has in excess of 2,500 plots on
sites where terms are agreed and which are being progressed to
acquisition.
Balance sheet
The Group's balance sheet remains strong. On 11 May 2012, the
Group had modest net debt of GBP4 million and expects to be in a
similar position at the half year. This balance sheet strength will
enable the Group to continue to invest in land to grow the
business.
Outlook
The Group remains confident of its prospects for 2012. Based on
current market conditions continuing, it is anticipated that
increased legal completions at a higher average sales price and at
an improved gross profit margin, alongside improved overhead
efficiency, will deliver a return on capital approaching 7.5% in
2012 (2011: 5%).
Enquiries: David Ritchie, Chief Executive
Jonathan Hill, Finance Director
Bovis Homes Group PLC
Tel: 07855 432 699
Andrew Jaques/Reg Hoare/James White
MHP Communications
Tel: 0203 3128 8100
***************************************************************************
Certain statements may be 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IMSEQLBFLEFXBBF
Vistry (LSE:VTY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Vistry (LSE:VTY)
Historical Stock Chart
From Jul 2023 to Jul 2024