TIDMBVS
RNS Number : 9438L
Bovis Homes Group PLC
19 August 2013
19 August 2013
BOVIS HOMES GROUP PLC
RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2013
50% INCREASE IN HOUSING PROFIT AND ACCELERATING GROWTH IN
RETURNS EXPECTED
Bovis Homes Group PLC today announces its half year results for
2013.
Financial and operational highlights for H1 2013
H1 2013 H1 2012 Change
----------------------------- ----------- ---------- ---------
Housing revenue ** GBP183.2m GBP157.1m +17%
GBP13.6m
Housing operating profit ** GBP20.4m * +50%
Housing operating margin ** 11.1% 8.7% * +2.4ppts
GBP17.5m
Operating profit GBP20.5m * +17%
Operating margin 11.1% 10.3% * +0.8ppts
GBP15.6m
Profit before tax GBP18.6m * +19%
Earnings per share 10.8p 8.6p * +26%
Dividend per share 4.0p 3.0p +33%
Net (debt) / cash GBP(48.4)m GBP22.2m
-- With market house price increases estimated at 1% to 2% to
date, average sales price increased by 15% to GBP188,500 (H1 2012:
GBP164,400) primarily due to mix, modestly ahead of Group's
expectations
-- Legal completions of 963 homes (H1 2012: 944 homes)
-- Average active sales outlets increased by 11% to 91 in H1 2013 (2012: 82)
-- 2,767 consented plots on 18 sites added to the land bank during H1 2013
-- Contracts in place as at 30 June 2013 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
-- Consented land bank of 15,579 plots as at 30 June 2013, with
potential gross profit of GBP733 million, calculated using
prevailing sales prices and build costs (31 December 2012: 13,776
plots with gross profit potential of GBP600 million)
-- 19,341 potential plots of strategic land (31 December 2012: 19,318 potential plots)
Current trading and outlook
-- Strong trading in the 32 weeks to 9 August 2013 with a 43%
increase in private reservations to 1,712 homes (2012: 1,195)
-- Sales rate improvement of 28% to 0.59 net private
reservations per site per week (2012: 0.46)
-- Cumulative sales achieved to 9 August for 2013 legal
completion of 2,505 homes (2012: 1,844), with the Group now circa
90% sold for legal completions in 2013
-- Average sales price for 2013 legal completions expected to be
at least 10% greater than 2012, primarily reflecting mix benefits
with modest market price improvements
-- Housing gross margin expected to be between 23% and 24% for
2013 full year (2012: 22.6%), with an expected operating margin
approaching 15% (2012*: 13.3%)
-- Further significant improvement in return on capital employed
for the 2013 full year, now expected to be at least 10.0% (2012*:
7.7%)
Commenting on the results, David Ritchie, Chief Executive of
Bovis Homes Group PLC said:
"The Group has performed strongly during the first half of 2013
and has delivered a 50% increase in housing operating profit. This
significant increase is a result of the ongoing successful
execution of the Group's strategy reflecting the compound positive
effect of increased volumes, improved average sales price and
stronger profit margins.
"The Group has delivered a 43% increase in private reservations
in the year to date, resulting from the improving quality and
increasing number of active sales outlets. This improvement has
been further assisted by the positive effect of stronger home buyer
sentiment, supported by the Help to Buy scheme launched in April
2013.
"The Group is circa 90% sold for the current financial year.
This will allow the Group to deliver the required remaining
reservations over the next few weeks and to build a significantly
enhanced forward order book for 2014.
"The positive trading position, combined with an increasing
proportion of legal completions on new, more profitable sites, will
enable the Group to increase profits significantly in 2013 in line
with its expectations, subject to stable market conditions. With a
further increase in capital turn, this strong profit is expected to
generate a return on capital for 2013 of at least 10%.
"The success of the Group in acquiring high quality, consented
residential land, combined with the strong pipeline of future land
opportunities, will support further sales outlet growth into 2014
and beyond. This in turn is expected to lead to further strong
improvements in return on capital employed going forward.
"With the progressive, sustainable improvement in the Group's
profits and the Board's confidence in the Group's growth strategy,
the interim dividend has been increased by 33% to 4.0 pence per
share."
* 2012 has been restated following the adoption of IAS19R
"Employee Benefits"
** Housing revenue, Housing operating profit and Housing
operating margin exclude revenue and profit from land sales
Enquiries: David Ritchie, Chief Results issued Andrew Jaques / Reg Hoare
Executive by /
Jonathan Hill, Finance James White / Giles Robinson
Director
Bovis Homes Group MHP Communications
PLC
On 19 August - tel: 020 3128 8100 On 19 August - tel: 020
3128 8756
Thereafter - tel: 01474 876200
Analysts wishing to remotely listen in to the presentation at
09:30am may dial +44 (0) 203 139 4830 followed by the participant
code 97251425#.
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
During the first half of 2013, Bovis Homes has made significant
progress in the ongoing delivery of its strategy to improve
shareholder returns with a strong improvement in housing profit, an
increase in the number of active sales outlets, a material
improvement in the rate of sale per site and the successful
continuation of investment in consented and strategic land.
The general UK economy remains weak, but is showing initial
signs of a recovery in growth. In the first half of 2013 the UK
housing market has been measurably stronger than in 2012. Home
buyers have greater access to mortgages and appear more confident
about buying a home. This has been supported by the Help to Buy
shared equity scheme, launched by the Government in April 2013.
Strategy
The focus of the Group's strategy remains to deliver material
improvements in shareholder returns by increasing profitability
whilst improving the efficiency of capital employed.
The Group will deliver enhanced profits from the compound
positive effect of:
-- Volume growth from a greater number of sales outlets,
primarily in the south of England, and improving the sales rate per
site.
-- Higher average sales price from traditional homes on better located sales outlets.
-- Stronger profit margins from an increasing proportion of
legal completions from new higher margin sites.
Building the future profit potential in the land bank will be
delivered by:
-- Adding new consented sites to the land bank which will achieve higher profit margins.
-- Continuing investment in strategic land and delivering
strategic land conversion through achievement of residential
planning consent.
-- Progressively trading through older, lower margin sites.
Greater efficiency of capital employed will be delivered by:
-- Efficient cash utilisation with more sites being acquired on deferred terms.
-- Maintaining tight control of work in progress.
-- Managing the land bank through acquiring smaller sites on
average and selectively selling consented plots on larger
sites.
Significant progress has been made in the delivery of this
growth strategy with c12,000 consented plots across c80 new sites
acquired since the housing market downturn. The majority of these
new sites are in the south of England and are expected to deliver
stronger sales prices and profit margins. These new sites are
contributing to an increase in the number of sales outlets operated
by the Group, which reached 92 during the first half of 2013, an
increase of over 50% compared to the low point of 60 sales outlets
reached during the first half of 2010.
The ongoing successful execution of this strategy will enable
the Group, assuming the continuation of current market conditions,
to continue to increase output capacity and, therefore increase
revenue and further improve profit margins in the full year 2013.
As a result, return on capital employed is now expected to increase
to at least 10.0% in 2013. In the foreseeable future, with capital
turn and margins expected to continue to improve, the Group
believes that the return on capital employed can achieve a level
within the range of 15% to 18%, assuming current market conditions
continue.
Revenue
The Group generated total revenue of GBP184.4 million during the
first half of 2013, compared to total revenue in H1 2012 of
GBP170.3 million.
Units H1 2013 H1 2012
------------------------------- ------- -------
Private legal completions 839 806
Social legal completions 124 138
------------------------------- ------- -------
Total legal completions 963 944
------------------------------- ------- -------
Revenue (GBPm)
Private legal completions 168.0 141.1
Social legal completions 13.6 14.1
------------------------------- ------- -------
Revenue from legal completions 181.6 155.2
Other revenue 1.6 1.9
------------------------------- ------- -------
Housing revenue 183.2 157.1
Land sales revenue 1.2 13.2
------------------------------- ------- -------
Total revenue 184.4 170.3
------------------------------- ------- -------
Revenue from legal completions in the first six months of 2013
was GBP181.6 million, 17% ahead of the same period in the prior
year. With other revenue of GBP1.6 million (H1 2012: GBP1.9
million), housing revenue was GBP183.2 million (H1 2012: GBP157.1
million). The land sales revenue during H1 2013 related to the
recognition of deferred land sales income, associated with the
delivery of services to a parcel of land sold in 2011 (H1 2012:
GBP13.2 million).
The Group legally completed 963 homes in the first six months of
2013 (H1 2012: 944). Of these, 839 were private homes (H1 2012: 806
homes), an increase of 4%. Social homes comprised 13% of total
legal completions (124 homes), compared to 15% (138 homes) in the
first half of 2012.
In the first six months of 2013 the average sales price of homes
legally completed increased by 15% to GBP188,500 (H1 2012:
GBP164,400), reflecting an improving mix of homes. The average
sales price of the Group's private legal completions was 14% higher
at GBP200,200 (H1 2012: GBP175,000), benefiting from stronger sales
prices on new sites. The underlying year to date increase in
housing market prices is considered to have been modest at some 1%
to 2%.
Operating profit
The Group delivered an operating profit for the six months ended
30 June 2013 of GBP20.5 million at an operating margin of 11.1% (H1
2012*: GBP17.5 million at an operating margin of 10.3%). Excluding
land sales, the Group increased operating profit by 50% to GBP20.4
million with an operating margin of 11.1% (H1 2012*: GBP13.6
million at an operating margin of 8.7%).
The gross margin achieved in the first half of 2013 was 23.0%,
which compared to 21.6% in H1 2012. The land sales profit
recognised during H1 2013 was GBP0.1 million, compared to GBP3.9
million in H1 2012. Housing gross margin increased to 23.1% (H1
2012: 20.9%), which was generated by an increasing contribution
from the higher margin sites acquired since the downturn.
As anticipated, overheads increased by 13% and constituted 12.0%
of housing revenue in the first half of 2013 (H1 2012*: 12.2%). The
Group has invested in sales and marketing activity, given the
increasing number of active sales outlets, and in progressing newly
acquired sites through the detailed planning and design phases to
start work on site. All such costs are written off as incurred. The
Group expects that overheads as a percentage of revenue will reduce
from 9.5% in 2012* to below 9% for the 2013 full year.
* 2012 has been restated following the adoption of IAS19R
"Employee Benefits"
Profit before tax
The Group achieved profit before tax of GBP18.6 million,
comprising operating profit of GBP20.5 million, net financing
charges of GBP2.0 million and a profit from joint ventures of
GBP0.1 million. This compares to GBP17.5 million of operating
profit, GBP2.0 million of net financing charges and a profit from
the joint venture of GBP0.1 million in the first six months of
2012, generating a profit before tax of GBP15.6 million in that
period, restated for IAS19R. There were no exceptional items in the
first six months of either 2013 or 2012.
Dividends
With the accelerating delivery of the Group's growth strategy
and a strong improvement in the performance and future prospects of
the Group, an interim dividend of 4.0p per share has been declared
(2012 interim dividend: 3.0p). The Board expects to continue to
increase dividends progressively as earnings per share
increase.
The interim dividend will be paid on 22 November 2013 to holders
of ordinary shares on the register at the close of business on 27
September 2013. The dividend reinvestment plan, introduced in 2012,
gives shareholders the opportunity to reinvest their dividends.
Financing & cashflow
The Group incurred net financing charges of GBP2.0 million in
the first half of 2013 (H1 2012*: GBP2.0 million). The effect of
IAS19R on the H1 2012 finance charge was an increased charge of
GBP0.5 million.
Having started the year with a net cash balance of GBP18.8
million, significant land investment has resulted in net debt
outstanding as at 30 June 2013 of GBP48.4 million. This comprised
GBP11.7 million of cash in hand, offset by GBP55.0 million of bank
debt, GBP4.8 million of loans received from the Government and a
GBP0.3 million liability, representing the fair market value of an
interest rate swap.
In the first six months of 2013, the Group generated an
operating cash inflow before land expenditure of GBP51.1 million
(H1 2012: GBP33.8 million), continuing to demonstrate strong
underlying cash generation from the Group's existing assets. As a
result of the Group's assertive land investments, payments in H1
2013 associated with land purchases less cash recoveries on land
sales were GBP107.7 million (H1 2012: GBP50.9 million). With a cash
outflow from non-trading items of GBP10.6 million, the overall net
cash outflow for the six months ending 30 June 2013 was GBP67.2
million (H1 2012: GBP28.6 million).
Taxation
The Group has recognised a tax charge of GBP4.2 million on
profit before tax of GBP18.6 million at an effective tax rate of
22.6% (H1 2012*: tax charge of GBP4.1 million at an effective rate
of 26.3%).
Pensions
The Group had a pension scheme surplus of GBP1.8 million as at
30 June 2013, compared to a deficit of GBP3.2 million at 31
December 2012. Scheme assets grew over the six months to GBP87.3
million from GBP85.2 million. Scheme liabilities decreased to
GBP85.5 million from GBP88.4 million, primarily due to an increase
in the discount rate applied to liabilities, as a result of rising
bond yields.
Net assets
Net assets per share as at 30 June 2013 was 577p as compared to
547p at 30 June 2012.
Analysis of net assets 2013 2012*
GBPm GBPm
------------------------------------------------- ------ -------
Net assets at 1 January 758.8 728.6
Profit after tax for the six months 14.4 11.5
Share capital issued 0.9 0.3
Net actuarial movement on pension scheme through
reserves 3.8 (4.1)
Adjustment to reserves for share based payments 0.3 0.2
Dividends settled (8.0) (4.7)
------------------------------------------------- ------ -------
Net assets at 30 June 770.2 731.8
------------------------------------------------- ------ -------
As at 30 June 2013 net assets were GBP11.4 million higher than
at the start of the year. Inventories increased during the six
months by GBP142.6 million to GBP1,006.2 million. As a result of
the strong investment in consented land, the land bank increased by
GBP119.2 million. Work in progress increased from the start of 2013
by GBP27.7 million, as the Group built a larger number of homes on
a greater number of sites for legal completion in H2 2013. Other
movements in inventories relate to a decrease in part exchange
properties of GBP4.3 million. Trade and other receivables reduced
by GBP21.2 million, as a result of a reduction in debtors related
to land sales of GBP8.9 million and recovery of amounts due from
housing associations at the 2012 year end. Available for sale
financial assets held as current assets at the 2012 year end of
GBP7.2 million have reduced to Nil, with the full recovery of cash
on units held in an investment fund into which the Group had sold
show home properties. Trade and other payables totalling GBP291.3
million (31 December 2012: GBP249.3 million) comprised land
creditors of GBP169.8 million (31 December 2012: GBP123.8 million)
and trade and other creditors of GBP121.5 million (31 December
2012: GBP125.5 million). Net cash reduced by GBP67.2 million.
Land
Land investments
The Group has continued to take advantage of opportunities to
acquire high quality consented land. In the six months ended 30
June 2013, the Group added 2,767 consented plots on 18 sites to the
land bank at a cost of GBP166 million. These plots have an
estimated future revenue of GBP629 million and an estimated future
gross profit potential of GBP163.3 million based on prevailing
sales prices and build costs, delivering an estimated future gross
margin of 26.0%. Of these, 866 plots were delivered through
conversion of strategic land.
As at 30 June 2013, the Group held contracts to acquire 1,018
plots on 11 sites, the majority of which are expected to be added
to the consented land bank in H2 2013.
Land bank
The Group held 15,579 consented plots in its land bank at 30
June 2013 (31 December 2012: 13,776). 73% of the plots within the
land bank were located in the south of England, where the housing
market continues to show greater strength, and 61% of the consented
land bank (9,522 plots) has been added since the low point of house
prices in the market downturn. The Group estimates that the gross
profit potential on the plots within the consented land bank at 30
June 2013, based on prevailing sales prices and build costs, has
increased to GBP733 million with a gross margin of 23.5% (31
December 2012: gross profit of GBP600 million at a gross margin of
22.7%).
The average consented land plot cost at the start of 2013 was
GBP45,800. This has increased to GBP48,200 at 30 June 2013 as a
result of the addition of new traditional housing sites in higher
value locations, where the average plot cost is higher, and a lower
number of written down plots held in the land bank at the end of
the half year (11% of land plots versus 13% at the start of the
year). The remaining provision on written down plots as at 30 June
2013 was GBP25.3 million.
The Group continues to recognise the importance of strategic
land. During the first half of 2013, the Group has continued to
invest in strategic land and also to convert strategic land into
the consented land bank. Good progress is being made in the
promotion of a number of major strategic sites with potential to
obtain planning in the near term. As at 30 June 2013, the Group's
strategic land bank stood at 19,341 potential plots, compared to
19,318 potential plots at 31 December 2012.
Principal risks and uncertainties
The Group is subject to a number of risks and uncertainties as
part of its activities. The Board regularly considers these and
seeks to ensure that appropriate processes are in place to manage,
monitor and mitigate these risks. The directors consider that the
principal risks and uncertainties facing the Group are those which
were outlined on page 22 of the Annual report and accounts 2012,
which is available from www.bovishomesgroup.co.uk, and additionally
risks relating to the supply chain in respect of the availability
and cost of labour and materials, which have heightened in recent
months. The Group has in place processes to monitor and mitigate
these risks.
Market conditions
In the first half of 2013, the UK housing market has
demonstrated signs of improvement with evidence of increased
mortgage availability and stronger home buyer confidence. Monthly
mortgage approvals which were previously steady at circa 50,000
approvals per month have increased to circa 58,000 approvals in
both May and June 2013, representing a significant increase in the
rate of approvals. Given the long standing constraint on activity
in the housing market arising from low levels of mortgage finance,
this recent increase is a positive indicator for the market.
The launch of the Government's Help to Buy shared equity scheme
on 1 April 2013 added to what was already a more confident housing
market backdrop and early signs are that this shared equity product
is having a positive effect on transactional activity in the new
homes market.
As a result of these market positives, trading across the new
build sector has been strong during the first half of 2013 and in
the early weeks of the third quarter, with good sales rates and a
less pronounced summer lull in reservations than in previous years.
As such, the trading environment appears robust at this time and is
creating a growing sense of confidence in the market.
With the increase in home buyer confidence and a greater ability
to transact, overall market pricing is showing an increased level
of resilience with marginal market sales price increases becoming
evident in certain locations, particularly in the south of
England.
Current trading
The Group has experienced strong trading in the year to date
with an increase in private reservations over the 32 trading weeks
to 9 August 2013 of 43% to 1,712 homes (2012: 1,195 homes). In this
period, the average private sales rate has been 0.59 net
reservations per site per week, 28% ahead of the sales rate of 0.46
achieved in the same period of the prior year. The growth in
reservations has also been delivered through an 11% increase in
active sales outlets, which have averaged 91 to date, compared to
an average of 82 in the prior period. Sales prices achieved to date
have been modestly ahead of the Group's expectations. Circa 500
customers have reserved using the Government's Help to Buy shared
equity scheme since its launch.
As at 9 August 2013, the Group had achieved 2,505 net sales for
legal completion in 2013, as compared to 1,844 net sales at the
same point in 2012, an increase of 661 homes.
Outlook
The Group is now around 90% sold for the current financial year.
Given stable market conditions, reservations achieved over the next
few weeks will deliver the targeted volume for 2013. This will
enable the Group to build a significantly enhanced forward order
book for 2014 from an earlier date than in prior years. The
delivery of an enhanced forward order book will provide a strong
base on which volume growth for the first half of 2014 can be
achieved. This is also expected to enable the Group to deliver a
more even balance of legal completions between the first and second
half years in 2014.
For 2013, the combination of the expected legal completion
volume and an expected increase of at least 10% in average sales
price will deliver strong year on year revenue growth.
The Group has achieved a strong profit margin improvement in the
first half of 2013 over H1 2012 and expects that, on the basis of
current reservations and subject to stable market conditions, the
housing gross margin for the full year will be between 23% and
24%.
With overheads as a percentage of total revenue expected to
reduce to below 9% for 2013 (2012*: 9.5%), the Group expects to
deliver an operating margin approaching 15% (2012*: 13.3%). Return
on capital employed for 2013 is now expected to be at least 10.0%
(2012*: 7.7%), representing a further significant improvement
arising from the Group's growth strategy.
Looking ahead to 2014, given the strong land acquisitions
achieved during 2013 to date, many of which were added early in the
year, the Group is confident that it can deliver another strong
year of sales outlet growth. Furthermore the strength of the
pipeline of further land acquisition opportunities gives the Group
confidence that sales outlet growth can continue through 2014 and
into 2015.
With an increasing proportion of legal completions expected from
sites acquired since the housing market downturn and with a greater
number of active sales outlets, the Group expects that, based on
stable market conditions, volumes, average sales price and profit
margins will continue to increase in 2014. This is expected to
deliver another strong increase in return on capital employed and
enable the Group to achieve a shareholder return in excess of the
Group's WACC. The Group considers that it has the resources and
opportunities to continue its strong growth beyond 2014 and,
subject to current market conditions continuing, the Group is well
positioned to further enhance shareholder returns.
Bovis Homes Group PLC
Group income statement
For the six months ended 30 June 2013 Six months Six months Year
(unaudited) ended ended ended
30 June 30 June 31 Dec
2013 2012 2012
restated restated
- note - note
1 1
GBP000 GBP000 GBP000
---------------------------------------- ----------------- ----------------- ------------
Revenue 184,412 170,275 425,533
Cost of sales (141,999) (133,516) (328,634)
---------------------------------------- ----------------- ----------------- ------------
Gross profit 42,413 36,759 96,899
Administrative expenses (21,896) (19,307) (40,186)
---------------------------------------- ----------------- ----------------- ------------
Operating profit before financing costs 20,517 17,452 56,713
Financial income 1,175 1,375 2,933
Financial expenses (3,110) (3,319) (6,656)
---------------------------------------- ----------------- ----------------- ------------
Net financing costs (1,935) (1,944) (3,723)
Share of profit of Joint Venture 59 127 254
Profit before tax 18,641 15,635 53,244
Income tax expense (4,238) (4,125) (13,051)
---------------------------------------- ----------------- ----------------- ------------
Profit for the period attributable
to equity holders of the parent 14,403 11,510 40,193
---------------------------------------- ----------------- ----------------- ------------
Earnings per share
Basic 10.8p 8.6p 30.2p
---------------------------------------- ----------------- ----------------- ------------
Diluted 10.8p 8.6p 30.1p
---------------------------------------- ----------------- ----------------- ------------
Group statement of comprehensive income
For the six months ended 30 June 2013 Six months Six months Year
(unaudited) ended ended ended
30 June 30 June 31 Dec
2013 2012 2012
restated restated
- note - note
1 1
GBP000 GBP000 GBP000
--------------------------------------- ----------------- ----------------- ------------
Profit for the period 14,403 11,510 40,193
Actuarial gains/(losses) on defined
benefit pension scheme 4,930 (5,420) (3,500)
Deferred tax on actuarial movements
on defined benefit pension scheme (1,134) 1,278 797
Total comprehensive income for the
period attributable to equity holders
of the parent 18,199 7,368 37,490
--------------------------------------- ----------------- ----------------- ------------
Bovis Homes Group PLC
Group balance sheet
As at 30 June 2013 (unaudited) 30 June 30 June 31 Dec
2013 2012 2012
GBP000 GBP000 GBP000
------------------------------------ --------- ------- ---------
Assets
Property, plant and equipment 12,155 11,521 11,910
Investments 5,126 5,236 5,387
Restricted cash 1,567 770 1,152
Deferred tax assets 2,411 4,435 3,097
Trade and other receivables 1,833 2,146 1,930
Available for sale financial assets 45,113 41,098 43,869
Retirement benefit assets 1,760 - -
Total non-current assets 69,965 65,206 67,345
------------------------------------ --------- ------- ---------
Inventories 1,006,208 820,460 863,597
Trade and other receivables 42,538 79,446 64,844
Available for sale financial assets - - 7,119
Cash and cash equivalents 11,706 27,794 24,396
Total current assets 1,060,452 927,700 959,956
------------------------------------ --------- ------- ---------
Total assets 1,130,417 992,906 1,027,301
------------------------------------ --------- ------- ---------
Equity
Issued capital 67,024 66,871 66,908
Share premium 213,287 212,318 212,550
Retained earnings 489,912 452,620 479,391
------------------------------------ --------- ------- ---------
Total equity attributable to equity
holders of the parent 770,223 731,809 758,849
------------------------------------ --------- ------- ---------
Liabilities
Bank and other loans 60,096 5,606 5,606
Other financial liabilities 599 1,102 706
Trade and other payables 81,006 65,888 50,681
Retirement benefit obligations - 7,980 3,171
Provisions 1,863 1,859 1,668
------------------------------------ --------- ------- ---------
Total non-current liabilities 143,564 82,435 61,832
------------------------------------ --------- ------- ---------
Trade and other payables 210,282 173,090 198,620
Provisions 1,413 1,535 2,065
Current tax liabilities 4,935 4,037 5,935
Total current liabilities 216,630 178,662 206,620
------------------------------------ --------- ------- ---------
Total liabilities 360,194 261,097 268,452
------------------------------------ --------- ------- ---------
Total equity and liabilities 1,130,417 992,906 1,027,301
------------------------------------ --------- ------- ---------
These condensed consolidated interim financial statements were
approved by the Board of directors on 16 August 2013.
Bovis Homes Group PLC
Group statement of changes in equity
For the six months ended 30 Total Issued Share Total
June 2013
(unaudited) retained capital premium
earnings
GBP000 GBP000 GBP000 GBP000
------------------------------- --------- ------- ------- -------
Balance at 1 January 2013 479,391 66,908 212,550 758,849
Total comprehensive income
and expense 18,199 - - 18,199
Deferred tax on other employee
benefits 51 - - 51
Issue of share capital - 116 737 853
Share based payments 281 - - 281
Dividends to shareholders (8,010) - - (8,010)
Balance at 30 June 2013 489,912 67,024 213,287 770,223
------------------------------- --------- ------- ------- -------
Balance at 1 January 2012 449,671 66,836 212,064 728,571
Total comprehensive income
and expense 37,490 - - 37,490
Deferred tax on other employee
benefits 33 - - 33
Issue of share capital - 72 486 558
Share based payments 861 - - 861
Dividends paid to shareholders (8,664) - - (8,664)
Balance at 31 December 2012 479,391 66,908 212,550 758,849
------------------------------- --------- ------- ------- -------
Balance at 1 January 2012 449,671 66,836 212,064 728,571
Total comprehensive income
and expense 7,368 - - 7,368
Deferred tax on other employee
benefits 14 - - 14
Issue of share capital - 35 254 289
Share based payments 230 - - 230
Dividends to shareholders (4,663) - - (4,663)
Balance at 30 June 2012 452,620 66,871 212,318 731,809
------------------------------- --------- ------- ------- -------
Bovis Homes Group PLC
Group statement of cash flows
For the six months 30 June 2013 (unaudited) Six months Six months Year
ended ended ended
30 June 30 June 31 Dec 2012
2013 2012 restated
restated -
- note note 1
1
GBP000 GBP000 GBP000
--------------------------------------------- ----------------- ----------------- -------------------
Cash flows from operating activities
Profit for the period 14,403 11,510 40,193
Depreciation 491 435 906
Impairment of available for sale assets 87 490 889
Financial income (1,175) (1,375) (2,933)
Financial expense 3,110 3,319 6,656
Profit on sale of property, plant and
equipment (19) (7) (14)
Equity-settled share-based payment
expense 281 230 861
Income tax expense 4,238 4,125 13,051
Share of results of Joint Venture (59) (127) (254)
Decrease/(increase) in trade and other
receivables 30,809 (5,243) (3,587)
Increase in inventories (142,611) (22,701) (65,841)
Increase/(decrease) in trade and other
payables 40,599 (10,781) 1,093
Decrease/(increase) in provisions and
employee benefits (457) 139 (2,401)
--------------------------------------------- ----------------- ----------------- -------------------
Cash generated from operating activities (50,303) (19,986) (11,381)
Interest paid (3,519) (863) (1,707)
Income taxes paid (5,635) (3,770) (9,922)
--------------------------------------------- ----------------- ----------------- -------------------
Net cash generated from operating activities (59,457) (24,619) (23,010)
--------------------------------------------- ----------------- ----------------- -------------------
Cash flows from investing activities
Interest received 95 813 773
Acquisition of property, plant and
equipment (744) (350) (1,213)
Proceeds from sale of plant and equipment 27 15 25
Dividends received from Joint Venture 417 243 243
Investment in restricted cash (415) (111) (493)
Net cash generated from investing activities (620) 610 (665)
--------------------------------------------- ----------------- ----------------- -------------------
Cash flows from financing activities
Dividends paid (8,010) (4,574) (8,664)
Proceeds from the issue of share capital 853 200 558
Drawdown of borrowings 54,544 - -
Net cash generated from financing activities 47,387 (4,374) (8,106)
--------------------------------------------- ----------------- ----------------- -------------------
Net decrease in cash and cash equivalents (12,690) (28,383) (31,781)
Cash and cash equivalents at start
of period 24,396 56,177 56,177
--------------------------------------------- ----------------- ----------------- -------------------
Cash and cash equivalents at end of
period 11,706 27,794 24,396
--------------------------------------------- ----------------- ----------------- -------------------
Notes to the condensed consolidated interim financial
statements
1 Basis of preparation
Bovis Homes Group PLC ('the Company') is a company domiciled in
the United Kingdom. The condensed consolidated interim financial
statements of the Company for the six months ended 30 June 2013
comprise the Company and its subsidiaries (together referred to as
'the Group') and the Group's interest in associates.
The condensed consolidated interim financial statements were
authorised for issue by the directors on 16 August 2013. The
financial statements are unaudited but have been reviewed by KPMG
LLP.
The condensed interim financial statements do not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006.
The figures for the half years ended 30 June 2013 and 30 June
2012 are unaudited. The comparative figures for the financial year
ended 31 December 2012 are not the Company's statutory accounts for
that financial year. Those accounts have been reported on by the
Company's auditors and delivered to the Registrar of Companies. The
report of the auditors was (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 preparation of a condensed set of financial statements
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amount of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Judgements made by management in the application of adopted
IFRSs that have significant effect on the financial statements and
estimates with a significant risk of material adjustment in
following years have been reviewed by the directors and remain
those published in the Company's consolidated financial statements
for the year ended 31 December 2012, with the exception of the
application of new accounting standards.
The Group has adopted the following new standards and amendments
to standards, including any consequential amendments to other
standards, with a date of initial application of 1 January
2013:
IFRS 13 establishes a single framework for measuring fair value
and making disclosures about fair value measurements, when such
measurements are required or permitted by other IFRSs. In
particular, it unifies the definition of fair value as the price at
which an orderly transaction to sell an asset or to transfer a
liability would take place between market participants at the
measurement date. In accordance with the transitional provisions of
IFRS 13, the Group has applied the new fair value measurement
guidance prospectively, and has not provided any comparative
information for new disclosures.
IAS 19 (Revised 2011) "Employee Benefits" outlines the
accounting requirements for employee benefits. The Standard
establishes the principle that the cost of providing employee
benefits should be recognised in the period in which the benefit is
earned by the employee, rather than when it is paid or payable, and
outlines how each category of employee benefits are measured,
providing detailed guidance in particular about post-employment
benefits. This impacts the measurement of various components
representing movements in the defined benefit pension obligation
and associated disclosures, but not the Group's total
obligation.
The application of IAS 19 (Revised 2011) has resulted in the
interest cost and expected return on assets being replaced by a net
interest charge/credit on the net defined benefit pension
liability/surplus. Certain costs previously recorded as part of
finance costs or other comprehensive income have now been presented
within administrative expenses.
The comparative period and full year have been restated with
profit being GBP0.4 million lower and GBP0.7 million lower
respectively, and other comprehensive income is GBP0.4 million
higher and GBP0.7 million higher including the tax impact of the
changes. The Group records actuarial adjustments immediately so
there has been no affect on the prior year pension deficit.
The condensed interim financial statements have been prepared in
accordance with IAS34 'Interim Financial Reporting' as endorsed by
the EU. As required by the Disclosure and Transparency Rules of the
Financial Conduct Authority, the condensed consolidated interim
financial statements have been prepared applying the accounting
policies and presentation that were applied in the preparation of
the Company's published consolidated financial statements for the
year ended 31 December 2012, which were prepared in accordance with
IFRSs as adopted by the EU.
2 Seasonality
In common with the rest of the UK housebuilding industry,
activity occurs year round, but there are two principal selling
seasons: spring and autumn. As these fall into two separate half
years, the seasonality of the business is not pronounced, although
it is biased towards the second half of the year under normal
trading conditions.
3 Segmental reporting
All revenue and profit disclosed relate to continuing activities
of the Group and are derived from activities performed in the
United Kingdom.
4 Earnings per share
(Unaudited) Six months Six months Year
ended ended ended
30 June 30 June 31 Dec
2013 2012 2012
restated restated
- -
note 1 note 1
pence pence pence
--------------------------- ---------- ---------- ---------
Basic earnings per share 10.8 8.6 30.2
Diluted earnings per share 10.8 8.6 30.1
--------------------------- ---------- ---------- ---------
Basic earnings per share
Basic earnings per ordinary share for the six months ended 30
June 2013 is calculated on a profit after tax of GBP14,403,000 (six
months ended 30 June 2012 restated: profit after tax of
GBP11,510,000; year ended 31 December 2012 restated: profit after
tax of GBP40,193,000) over the weighted average of 133,464,080 (six
months ended 30 June 2012: 133,248,378; year ended 31 December
2012: 133,294,726) ordinary shares in issue during the period.
Diluted earnings per share
The calculation of diluted earnings per share at 30 June 2013
was based on the profit attributable to ordinary shareholders of
GBP14,403,000 (six months ended 30 June 2012 restated: profit after
tax of GBP11,510,000; year ended 31 December 2012 restated: profit
after tax of GBP40,193,000).
The Group's diluted weighted average ordinary shares potentially
in issue during the six months ended 30 June 2013 was 133,719,575
(six months ended 30 June 2012: 133,372,229; year ended 31 December
2012: 133,432,911).
5 Dividends
The following dividends per qualifying ordinary share were
settled by the Group.
(Unaudited) Six months Six months
ended ended Year ended
30 June 30 June 31 Dec
2013 2012 2012
GBP000 GBP000 GBP000
May 2013: 6.0p (May 2012: 3.5p) 8,010 4,663 4,663
November 2012: 3.0p - - 4,001
-------------------------------- ---------- ---------- ------------
8,010 4,663 8,664
-------------------------------- ---------- ---------- ------------
The Board determined on 16 August 2013 that an interim dividend
of 4.0p for 2013 be paid. The dividend will be settled on 22
November 2013 to shareholders on the register at the close of
business on 27 September 2013. This dividend has not been
recognised as a liability at the balance sheet date.
6 Related party transactions
Transactions between fellow subsidiaries, which are related
parties, during the first half of 2013 have been eliminated on
consolidation, as have transactions between the Company and its
subsidiaries during this period. The Group's associates and joint
ventures are disclosed in the Group's Annual report and accounts
2012.
Transactions between the Group and key management personnel in
the first half of 2013 were limited to those relating to
remuneration, previously disclosed as part of the Group's Report on
directors' remuneration published with the Group's Annual report
and accounts 2012. No material change has occurred in these
arrangements in the first half of 2013.
Mr Malcolm Harris, a Group Director, is a non-executive director
of the Home Builders Federation (HBF), to whom the Group pays
subscription fees and fees for research as required. Net amounts
payable for each period were as follows:
(Unaudited) Six months Six months
ended ended Year ended
30 June 30 June 31 Dec
2013 2012 2012
GBP000 GBP000 GBP000
------------ ---------- ---------- ------------
HBF 59 47 93
------------ ---------- ---------- ------------
There have been no related party transactions in the first six
months of the current financial year which have materially affected
the financial performance or position of the Group, and which have
not been disclosed.
Transactions with Joint Venture
Bovis Homes Limited is contracted to provide property and
letting management services to Bovis Peer LLP. Fees charged in the
period, inclusive of VAT, were GBP73,000 (six months ended 30 June
2012: GBP72,000; year ended 31 December 2012: GBP144,000).
Loans totalling GBP1,575,355 were provided in prior years at an
annual interest rate of LIBOR plus 2.4%. No other loans or sales of
inventory have taken place.
Interest charges made in respect of the loans were GBP24,000
(six months ended 30 June 2012: GBP26,000; year ended 31 December
2012: GBP49,000).
7 Reconciliation of net cash flow to net cash
(Unaudited) Six months Six
ended months Year ended
ended
30 June 30 June 31 Dec
2013 2012 2012
GBP000 GBP000 GBP000
------------------------------------------ ---------------- -------- --------------------------------------
Net decrease in cash and cash equivalents (12,690) (28,383) (31,781)
Drawdown of borrowings (54,544) - -
Fair value adjustments to interest
rate swaps 115 (76) (9)
Fair value adjustment to interest free
loans (61) (128) (195)
Net cash at start of period 18,790 50,775 50,775
------------------------------------------ ---------------- -------- --------------------------------------
Net cash at end of period (48,390) 22,188 18,790
------------------------------------------ ---------------- -------- --------------------------------------
Analysis of net cash:
Cash 11,706 27,794 24,396
Bank and other loans (59,795) (5,123) (5,190)
Fair value of interest rate swaps (301) (483) (416)
Net cash (48,390) 22,188 18,790
------------------------------------------ ---------------- -------- --------------------------------------
8 Circulation to shareholders
This interim report is sent to shareholders. Further copies are
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 analyst presentation document which will be presented
at the Group's results meeting on 19 August 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DQLFFXVFFBBD
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