TIDMBVS
RNS Number : 7508I
Bovis Homes Group PLC
08 July 2013
8 July 2013
Bovis Homes Group PLC
Trading update
Strong continuing improvement in housing profit and significant
land investment
The Group is today issuing a trading update for the six month
period ended 30 June 2013 ahead of reporting its half year results
due to be announced on Monday, 19 August 2013.
David Ritchie, the Chief Executive of Bovis Homes Group PLC
said:
"The Group has performed well in the first half of 2013 with a
significant further improvement in housing profit, delivered from
the ongoing successful execution of the Group's growth strategy.
Trading in the first half of 2013 has been strong and the Group has
achieved a 40% increase in private reservations compared to the
same period in 2012. Continuing its success in the land market, the
Group has added 2,767 new consented plots to the land bank. With
the positive progress in executing its growth strategy, the Group
is well positioned to deliver higher shareholder returns."
Trading
The Group has delivered reservations ahead of its expectations,
achieving 1,389 net private reservations in the first six months
(H1 2012: 993), a 40% increase. The net private sales rate per site
per week improved by 26% to 0.59 (H1 2012: 0.47), benefiting from
the improving quality of active sales outlets and the positive
effect of stronger home buyer sentiment, supported by the Help to
Buy scheme launched in April 2013. In the second quarter of 2013,
the Group has achieved a net private sales rate per site per week
approximately 60% ahead of the prior year comparative period.
During the first six months, the Group has traded on an average
of 91 active sales outlets, 11% greater than the average of 82 in
the same period in 2012. As at 30 June 2013 cumulative reservations
expected to legally complete in 2013, including social housing,
stood at 2,287 homes (30 June 2012: 1,646 homes). Sales prices
achieved to date are modestly ahead of the Group's
expectations.
For the six months ended 30 June 2013, the Group legally
completed 963 homes (H1 2012: 944). The Group's average sales price
on legal completions increased by 15% to GBP188,500 (H1 2012:
GBP164,400), primarily from the improving mix of homes.
For the half year, the Group expects to report a housing gross
margin of circa 23% (H1 2012: 20.9%) and a housing operating margin
approaching 11% (H1 2012: 8.7% restated*). The positive compound
effect of increasing volume, the strong increase in the average
sales price and the improving profit margin will lead to a strong
increase in housing profit in the half year compared to the first
half of last year. There was no land sale income or profit in the
first half of 2013, compared to land sale income of GBP13.2 million
with a profit of GBP3.9 million in the first half year in 2012.
Subject to stable market conditions continuing, sales rates are
expected to support both the delivery of the Group's volume growth
targets for 2013 and allow the Group to enhance its year end
forward order book, supporting further growth in 2014.
Land management
The Group continues to take advantage of opportunities to
acquire high quality consented land. In the six months ended 30
June 2013, the Group has added 2,767 consented plots on 18 sites,
on which it expects to deliver a return on capital in excess of
20%. The Group also has in place contracts to acquire another 1,018
plots on 11 sites, the majority of which are expected to be added
to the consented land bank in H2 2013.
Balance sheet
Whilst investing strongly in land in the first half of the year,
the Group has retained a prudent balance sheet. As at 30 June 2013
net debt was GBP48 million. The Group's balance sheet management,
cash resources and flexible banking arrangements continue to
support the Group's accelerated investment in consented land to
grow the business and enhance returns.
Market conditions
Even though the general economic background remains challenging,
the housing market has shown signs of strong improvement. Consumers
are increasingly able to access mortgage finance and the launch of
the Help to Buy shared equity scheme, replacing FirstBuy, has had a
positive effect on customers' confidence to buy a home and their
ability to transact. These positive effects are expected to support
greater activity in the new homes market, which in turn will
provide an impetus to the number of new homes built. The Group
continues to view positively the Government's initiatives to
support the housebuilding sector.
Outlook
The Group remains confident of its prospects to further enhance
shareholder value and continue to deliver improvements in returns
over the coming years. The compound positive effect of greater
volume, increasing average sales price and improving housing profit
margin provides good visibility that, based on stable market
conditions continuing, return on capital employed can be further
improved in 2013 to circa 10% (2012: 7.7% restated*).
Notice of results
The Group intends to issue its half year results for the six
months ended 30 June 2013 on 19 August 2013.
* 2012 comparables restated for amendment to IAS19 "employee
benefits"
-ENDS-
Enquiries: David Ritchie, Chief Executive
Jonathan Hill, Finance Director
Bovis Homes Group PLC
Tel: 07855 432 699
Andrew Jaques/Reg Hoare/James White/Giles Robinson
MHP Communications
Tel: 0203 3128 8788
Conference Call for analysts
David Ritchie, Chief Executive, and Jonathan Hill, Finance
Director, of Bovis Homes will host a conference call at 09:00am
today, Monday 8 July 2013, to discuss this trading statement. To
access the call please dial 020 3139 4830 and quote passcode:
74272902#. Please dial in 5 minutes prior to the start of the
conference call to allow time for registration. A recording of the
conference call will be available until midnight on Monday 15 July
2013, commencing approximately 30 minutes after the live call has
finished, on: 020 3426 2807, access code: 640502#.
***************************************************************************
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
TSTUVVVROAABRAR
Vistry (LSE:VTY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Vistry (LSE:VTY)
Historical Stock Chart
From Jul 2023 to Jul 2024