TIDMBVS
RNS Number : 6950A
Bovis Homes Group PLC
24 February 2014
24 February 2014
BOVIS HOMES GROUP PLC
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013
GROWTH STRATEGY DELIVERING STRONGLY IMPROVING RETURNS
Bovis Homes Group PLC today announced its final results for the
financial year ended 31 December 2013 which have been prepared in
accordance with International Financial Reporting Standards as
adopted by the EU ('IFRS').
Financial and operational
highlights 2013 2012 * Change
Revenue GBP556.0m GBP425.5m +31%
Operating profit GBP82.8m GBP56.7m +46%
Operating margin 14.9% 13.3% +1.6ppts
Profit before tax GBP78.8m GBP53.2m +48%
Basic earnings per share 44.9p 30.2p +49%
Dividend per share 13.5p 9.0p +50%
ROCE 10.4% 7.7% +2.7ppts
Net (debt) / cash GBP(18.0)m GBP18.8m
* Adjusted for IAS19R
-- Profit growth reflects continuing benefit of the Group's growth strategy:
-- 19% growth in legal completions to 2,813 homes (2012: 2,355)
-- 14% increase in average sales price to GBP195,100 (2012:
GBP170,700), primarily due to mix of larger homes and a greater
proportion of higher value southern sites
-- Operating profit margin increased to 14.9% (2012*: 13.3%)
-- Enhanced forward order book at end of 2013:
-- 178% increase in private forward reservations to 692 homes (2012: 249)
-- 26% increase in production in 2013 to 2,935 homes (2012: 2,322 homes)
-- Strong, geographically targeted investment in land during 2013:
-- 3,737 plots on 27 sites added to the consented land bank during the year
-- Circa 2,800 plots on 12 sites legally contracted, awaiting satisfaction of conditions
-- Land bank of 14,638 consented plots at 31 December 2013, with
potential gross profit of GBP727 million, calculated using current
sales prices and current build costs
-- Planning approved on three major strategic projects at
Witney, Winnersh and Bishops Stortford which will deliver, in
aggregate, over 1,200 plots to consented land in the future
Positive current trading (to 21 February 2014)
-- 468 private reservations achieved in first seven weeks of
2014 (2013: 285), an increase of 64%
-- 1,875 cumulative sales achieved to 21 February 2014 for 2014 legal completion (2013: 1,064)
-- Advanced stage of agreement on two private rental sector
("PRS") transactions for circa 500 homes, of which approximately
250 would legally complete in 2014
-- Sales prices achieved to date circa 2% ahead of Group expectations
-- Circa 2,300 plots on nine sites added to the consented land
bank during the first seven weeks of 2014, including a major
investment in a new settlement at Sherford in Devon
Commenting, David Ritchie, the Chief Executive of Bovis Homes
Group PLC said:
"The Group has a clear and robust growth strategy, which has
enabled the delivery of an excellent performance in 2013, with
strong growth in profit and return on capital employed. A rigorous
focus on targeted land acquisition, together with tight management
of costs and capital have enabled the Group to take full advantage
of the more favourable market conditions to increase volumes,
improve sales prices and strengthen margins.
"I would like to recognise the considerable effort, commitment
and hard work of our employees during 2013 and to thank them all
for their contribution to the Group's success.
"The Group is focused on delivering further improvements in
shareholder returns through material growth in profits and capital
turn. The housing market is recovering with higher activity levels
and improving house prices expected to more than compensate for
supply chain cost increases. This positive market is acting as a
welcome backdrop for the Group's continued successful execution of
its growth strategy.
"With the current strong sales position and assuming current
market conditions continue, the Group is confident of its ability
to deliver strong increases in volume, revenue and profit in 2014
with the aim of achieving a return on capital employed for the year
of at least 14%."
Enquiries: David Ritchie, Chief Executive Results issued Reg Hoare /
by
Jonathan Hill, Finance James White
Director
Bovis Homes Group PLC MHP Communications
On 24 February - On 24 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 2013, delivering a
strong improvement in revenue, profits and return on capital
employed.
The Group has continued to acquire high quality land assets in
the south of England and in prime locations in the midlands and
northwest, where it is considered the housing market will be more
robust. As a result, the Group has grown active sales outlets,
leading to higher volumes. With an increasing proportion of legal
completions from post downturn sites, average sales price and
profit margins have improved.
Furthermore through an improvement in the efficiency of capital
employed by active management of the land bank and work in
progress, the Group has increased its capital turn. The combination
of improved profitability and increased capital turn has delivered
a strong improvement in the Group's return on capital employed.
Bovis Homes aims to be a quality housebuilder delivering high
returns generated from a strong land bank, much of it strategically
sourced, and quality homes sold at a premium price. In order to
deliver improved returns, the following clear strategic objectives
for 2013 were set out and have been delivered:
1. Increase operating profits
2. Enhance future returns through targeted land investment
3. Improve efficiency of capital employed
As a result of delivering against these three strategic
objectives, the Group has achieved a significant increase in return
on capital employed to 10.4% in 2013 from 7.7% in 2012.
1. Increase operating profits
Operating profit increased in 2013 by 46% to GBP82.8 million, as
a result of the compound positive effect of an increased volume of
legal completions sold at a higher average sales price generating a
stronger profit margin.
During 2013, the Group achieved 2,773 private reservations, a
48% increase on the 1,873 achieved in 2012. Net private sales per
site per week increased by 34% to 0.59 (2012: 0.44), as a result of
the improving quality of the Group's active sales outlets and the
benefit of a recovering housing market. Active sales outlets
averaged 90 during 2013, an increase of 10% on the 82 achieved
during 2012.
One effect of the positive sales rate was that some sites were
completed more quickly than expected. Also certain sites were
launched later than anticipated due to planning delays. These two
factors led to the Group achieving a marginally lower average
number of active sales outlets than had been expected at the start
of 2013.
The higher level of private reservations enabled the Group to
deliver a 26% increase in private legal completions to 2,330 (2012:
1,854), as well as carrying forward a significantly enhanced
private forward order book of 692 private reservations, up from 249
at the beginning of 2013. This improved forward order book will
support the Group's volume ambitions for 2014 and enable the Group
to deliver a more balanced profile of legal completions through the
year, with an increased proportion of its full year legal
completions in the first half. Additionally, this will assist in
improving the working capital cycle of the Group through the
year.
During 2013, the Group supported new customers accessing the
housing market using the Government's Help to Buy shared equity
scheme. In the year new homes were handed over to 872 customers who
were able to use shared equity products, including the Help to Buy
scheme, as part of their home purchase. During 2012, shared equity
products (including Government backed schemes) were used to support
customers buying 535 new homes. The Group sees the Help to Buy
scheme as an attractive replacement for other shared equity
products.
483 social homes were legally completed in 2013 (2012: 501),
constituting 17% of total legal completions (2012: 21%). The Group
decided to prioritise private build over social, particularly
during Q4 2013, to ensure that private production was not
constrained by tightness in the supply of sub-contract labour or
materials lead times. At the beginning of 2014 the Group held 685
forward social reservations (2013: 529).
In aggregate the Group delivered 2,813 legal completions in
2013, a 19% increase on the 2,355 in 2012. To support this
significant increase in new home delivery, the Group increased its
construction output in 2013 by 26% to 2,935 homes (2012:
2,322).
The Group achieved a 13% increase in private average sales price
to GBP212,700 in 2013 (2012: GBP188,700). This has been driven
primarily by changes in the Group's product mix of private legal
completions with an increase in larger traditional two storey homes
and a decrease in townhouses. The Group considers that in its areas
of operation sales prices have increased by between 2% and 3% with
stronger gains in the south of England offset by modest movements
in the midlands and north of England. Including social homes, the
Group's average sales price was 14% higher at GBP195,100 (2012:
GBP170,700).
Housing gross margin increased from 22.6% in 2012 to 23.5% in
2013, resulting from the increased contribution from legal
completions on stronger margin sites acquired post the housing
market downturn. This margin progression was impacted by the
planned incremental year on year cost of circa GBP3.5 million to
promote strategic land assets.
The housing gross margin was also affected for the first time in
many years by increases in build costs, mainly from labour rates.
Increased activity in the new homes market has led to demand for
subcontract labour exceeding supply. As a result, subcontractors
have seen the ability to renegotiate at higher rates. Given the
timing of such increases, the Group has been able to limit the cost
impact well within the benefit from increasing sales prices.
As a result of the compound positive effect of volume growth,
higher average sales price and improved gross profit margin,
housing gross profit increased by 41% to GBP130.2 million (2012:
GBP92.1 million). With overheads well controlled, the operating
margin increased to 14.9% (2012*: 13.3%).
2. Enhance future returns through targeted land investment
The Group applies rigorous criteria for the acquisition of
consented land, reflecting not only the anticipated margin and
return on capital, but also site specific risks and geographic
concentration risk.
2013 was a successful year for land investment. The Group
continued to invest in high quality consented land assets,
retaining its focus on specific areas of search in the south of
England and prime locations in the midlands and northwest. During
the year the Group added 3,737 plots on 27 sites to the consented
land bank at a cost of GBP225 million (2012: 2,651 consented plots
at a cost of GBP161 million). The plots added have an estimated
future revenue of GBP841 million and an estimated future gross
profit potential of GBP216 million, based on current sales prices
and current build costs, and are expected to deliver a gross margin
of over 25% and a ROCE well in excess of the Group's 20% hurdle
rate. A further circa 2,800 plots on 12 sites were contracted at
the end of 2013, awaiting satisfaction of legal conditions.
In 2014 to date, circa 2,300 consented plots on nine sites have
been added to the consented land bank, many of these plots arising
from the successful completion of the contracts secured during
2013.
Included in the sites added to date in 2014 is a major new
settlement at Sherford in Devon, where the Group owns 1,658
consented plots. The land cost of this site is very low, due to the
high level of infrastructure spend which is phased over the life of
the site. As a result, the peak funding on this long term major
project is expected to be between 1% and 2% of the Group's net
assets. Sherford will be an anchor site within the South West
region over many years and is expected to deliver a strong margin
and an excellent return on capital employed.
The consented land bank amounted to 14,638 plots as at 31
December 2013 (2012: 13,776). The Group estimates that the gross
profit potential on these consented plots at the 2013 year end,
based on current sales prices and current build costs, was GBP727
million with a gross margin of 24.2% (2012: GBP600 million at
22.7%).
At the year end, the consented land bank included 9,197
consented plots (63% of total), which have been acquired since the
housing market downturn (2012: 7,368 plots and 54% of total). The
average consented land plot cost was GBP45,800 at the start of 2013
and increased over the year to GBP48,900, as a result of a lower
number of written down plots held in the land bank (10% of land
plots versus 13% at the start of the year) and the addition of new
prime traditional housing sites where the average plot cost is
higher.
The strategic land bank at 31 December 2013 contained 20,108
potential plots (2012: 19,318). The Group converted circa 1,200
plots of strategic land having achieved consent during 2013. The
Group has continued to invest in new strategic land assets to
assist in replenishing its consented land bank at strong margins in
the future.
In addition, the Group has secured resolution to grant planning
consent on three of its major strategic land assets at Winnersh,
Witney and Bishops Stortford. These sites will deliver in aggregate
over 1,200 consented plots at a significant discount to market
value. Planning consents will be formally released once the
planning agreements for each site are signed. Good progress
continues to be made on a number of other major strategic projects,
where material promotion costs are being incurred to achieve
planning consents. This is expected to deliver significant numbers
of consented plots over the next few years.
3. Improve efficiency of capital employed
Improving capital turn is critical to the Group's ability to
deliver material growth in return on capital employed. Capital turn
has continued to improve from 0.5 in 2011 to 0.7 in 2013. The
consented land bank is the key element of capital employed. While
this has grown in size with the investments made by the Group, the
average number of plots per active sales outlet has continued to
decrease from 188 in 2011 to 158 in 2013. The average number of
plots per site acquired in 2013 was 138 plots, compared to 147 in
2012.
Work in progress turn increased to 2.7 times in 2013 from 2.5 in
2012. Notional units of production at the end of 2013 increased to
1,040 (2012: 918), as a result of the increase in active sales
outlets and to facilitate higher legal completion volumes in the
first half of 2014 over the first half of 2013. The value of work
in progress has increased to GBP202.3 million from GBP172.7
million.
With the land investment undertaken to date and the strength of
the ongoing land pipeline, the output capacity of the business is
expected to increase. On the basis of current market conditions,
capital turn should improve further in 2014 and beyond.
Structure
In anticipation of increasing activity levels in 2014 and
beyond, the Group is now operating from six regions in two
divisions with plans for two further regions to become operational
in the foreseeable future (previously the Group operated through a
three region structure). This new structure will provide the Group
with a business capacity of between 4,000 and 5,000 homes per
annum, whilst maintaining close alignment to the localities in
which it operates with significant local knowledge. The
geographical focus of the Group remains exactly as before, being in
the south of England and in prime locations in the midlands and
northwest. Although this change will lead to a limited increase in
the Group's overhead expenditure in absolute terms, overhead
efficiency is expected to continue to improve in 2014 and
beyond.
The two divisions, South and Central, are led by Divisional
Managing Directors, Malcolm Pink and Keith Carnegie respectively.
The strength and experience of the Group's existing senior
management is demonstrated by six of the eight regional managing
directors being internal appointments.
The Board
Colin Holmes has decided to retire from the Board at the 2014
Annual General Meeting to be held on 16 May 2014 after seven and a
half years as a non-executive director and seven years as
Remuneration Committee chairman. The Board would like to thank
Colin for his valuable contribution during his time on the Board.
Alastair Lyons will succeed as Remuneration Committee chairman
following the AGM.
Market conditions
Housing market conditions improved materially during 2013. An
increase in the number of mortgage products including a greater
availability of high loan to value mortgages has supported a
greater number of housing transactions. Bank of England mortgage
approvals statistics show a significant increase during the second
half of 2013 with monthly figures approaching a level more
reflective of a healthy housing market.
Homebuyer confidence appears to have improved materially with
more positive views on the future direction of house prices,
employment and security of earnings. With this improving backdrop,
trading conditions are expected to remain broadly positive during
2014, supporting sales rates and sales prices.
House prices have been rising at a modest rate across many
regional markets with stronger rises in the south of England,
offset by more modest changes in the midlands and north of England.
As expected, with activity and sales prices rising, the cost of
building houses is also rising as material suppliers enjoy
increased demand for their products and subcontractors see an
ability to increase rates.
The Government's Help to Buy shared equity product, launched in
April 2013, has provided strong impetus to the new build industry,
supporting first time buyers in particular. The Help to Buy
mortgage indemnity product was also launched in Q4 2013 and, given
it assists not just new build customers, the Group considers this
Government backed product to be further support to activity in the
wider housing market.
As a result of the positive activity in the housing market, the
support provided to banks to facilitate cost effective mortgage
lending via the Government's Funding for Lending Scheme is being
withdrawn. The Group views this development positively, as it
signals that the mortgage market is beginning to operate more
effectively without assistance.
Current trading
The Group entered 2014 with a forward sales order position of
1,377 homes, a 77% improvement on the 778 homes brought forward at
the start of 2013. Of these, 692 were private homes (2013: 249) and
685 were social (2013: 529).
The Group has delivered 468 private reservations in the first
seven weeks of 2014 (2013: 285), an increase of 64%. Operating from
an average of 93 active sales outlets during this period (2013:
90), the Group has achieved a sales rate per site per week of 0.72,
a 60% improvement on the 0.45 achieved in the comparable period in
2013. Sales prices achieved on these private reservations to date
have been ahead of the Group's expectations by circa 2%.
As at 21 February 2014, the Group held 1,875 sales for legal
completion in 2014, as compared to 1,064 sales at the same point in
2013, an increase of 76%. Of these, private sales amounted to 1,160
homes (2013: 534), with social housing sales of 715 homes (2013:
530).
Build to Rent scheme - private rental sector
In 2012, the Government announced its Build to Rent scheme, with
the intention of providing funding support to assist in the
establishment of PRS vehicles. Whilst not yet contracted, the Group
has agreed terms and is at an advanced stage in finalising
agreements to deliver new homes under two separate PRS transactions
on sites owned by the Group, each using support from the
Government's scheme.
The two transactions involve approximately 500 homes, of which
circa 250 would legally complete in 2014 with the remainder in
2015. The profit delivery combined with the acceleration of capital
turn enabled by these transactions would act as a further positive
contributor to increasing the Group's return on capital employed in
both 2014 and 2015.
Outlook
The successful continued execution of the growth strategy in
2013 has positioned the Group strongly to continue to grow in 2014
and beyond.
The sales achieved in 2014 to date combined with the expected
growth in active sales outlets should enable the Group to deliver a
strong increase in total reservations during 2014, assuming current
market conditions continue. From these reservations excluding any
potential volume arising from the PRS transactions (250 homes in
2014), the Group aims to deliver between 3,400 and 3,600 legal
completions in 2014 and a stronger forward order book for 2015.
This legal completion volume will represent major growth in the
Group's output and will require a material increase in build
activity compared to 2013. During a period of constrained capacity
in the material and labour supply markets, build costs for 2014
legal completions are expected to increase by between 3% and 5%.
However with a continuing tight focus on the Group's operational
performance, market rises in sales prices are expected to at least
cover such cost increases.
The Group expects further growth in the proportion of legal
completions from post downturn sites to increase both the average
sales price and housing gross margin in 2014. When combined with
improving overhead efficiency, the operating margin is expected to
increase to approximately 17%.
With a clear focus on controlling the capital employed of the
Group through management of the land bank and control of working
capital, improving capital turn is expected to be at least 0.8 in
2014. Based on current market conditions continuing and excluding
any potential volume arising for the PRS transactions, the Group
expects to deliver a strong increase in return on capital employed
to at least 14% in 2014 with the expectation of further progress
thereafter.
Financial Review
Revenue
During 2013, the Group generated total revenue of GBP556.0
million, an increase of 31% on the previous year (2012: GBP425.5
million). Housing revenue in 2013 was GBP548.7 million, 36% ahead
of the prior year (2012: GBP402.0 million) and other income was
GBP4.3 million (2012: GBP5.7 million). Land sales revenue,
associated with one land sale and the recognition of deferred
income on land sales legally completed in prior years, was GBP3
million in 2013, compared to three land sales achieved in 2012 with
a total revenue of GBP17.8 million.
Operating profit
The Group delivered a 46% increase in operating profit for the
year ended 31 December 2013 to GBP82.8 million (2012*: GBP56.7
million) at an operating margin of 14.9% (2012*: 13.3%). Housing
operating margin in 2013 was 15.0% (2012: 12.7%) and reached 16.8%
in the second half of 2013.
Housing gross margin increased to 23.5% in 2013 from 22.6% in
2012. The gross margin benefited from the increased contribution
from legal completions on sites acquired post the housing market
downturn. As previously disclosed, the Group increased the
promotional expenditure on strategic land by circa GBP3 million in
2013 over 2012, which held back the year on year margin growth.
This level of cost incurred in 2013 to promote strategic land is
expected to remain relatively stable during 2014.
The profit on land sales in 2013 was GBP0.1 million (2012
benefited from a material profit of GBP4.8 million at a margin of
27%). Total gross profit was GBP130.3 million (gross margin:
23.4%), compared with GBP96.9 million (gross margin: 22.8%) in
2012.
Overheads, including all sales and marketing costs, increased in
2013 by 18%, as the Group invested early to support the large
number of land assets acquired and the increased number of sales
outlets. The overheads to revenue ratio improved to 8.5% in 2013
from 9.5% in 2012*.
Profit before tax and earnings per share
Profit before tax increased by 48% to GBP78.8 million,
comprising operating profit of GBP82.8 million, net financing
charges of GBP4.3 million and a profit from joint ventures of
GBP0.3 million. This compares to GBP53.2 million of profit before
tax in 2012*, comprising GBP56.7 million of operating profit,
GBP3.7 million of net financing charges and a profit from joint
ventures of GBP0.2 million. Basic earnings per share for the year
improved by 49% to 44.9p compared to 30.2p in 2012*.
Financing
Net financing charges during 2013 were GBP4.3 million (2012*:
GBP3.7 million). Net bank charges were GBP3.5 million (2012: GBP2.6
million), as a result of higher net debt during 2013 compared to
2012. The Group incurred a GBP3.1 million finance charge (2012:
GBP3.1 million charge), reflecting the imputed interest on land
bought on deferred terms. The Group also benefited from a finance
credit of GBP2.3 million (2012: GBP1.7 million) arising from the
unwinding of the discount on its available for sale financial
assets during 2013. There were GBP0.3 million of other financing
credits during 2012.
Taxation
The Group has recognised a tax charge of GBP18.7 million at an
effective tax rate of 23.7% (2012*: tax charge of GBP13.1 million
at an effective rate of 24.5%). The Group has a current tax
liability of GBP9.2 million in its balance sheet as at 31 December
2013 (2012*: current tax liability of GBP5.7 million).
Dividends
Given the ongoing material improvement in the Group's
performance and the confidence of the Board in the continued
delivery of the Group's strategy, the Board has proposed a 2013
final dividend of 9.5p per share. This dividend will be paid on 23
May 2014 to holders of ordinary shares on the register at the close
of business on 28 March 2014. The dividend reinvestment plan gives
shareholders the opportunity to reinvest their dividends in
ordinary shares.
Combined with the interim dividend paid of 4.0p, the dividend
for the full year totals 13.5p compared to a total of 9.0p paid in
2012, an increase of 50%. The Board expects to grow dividends
progressively as earnings per share increase.
Net assets
2013 2012*
GBPm GBPm
------------------------------------------------ ------ -----
Net assets at 1 January 758.8 728.6
Profit after tax for the year 60.1 40.2
Share capital issued 1.0 0.6
Net actuarial movement on pension scheme
through reserves 2.9 (2.7)
Deferred tax on other employee benefits - (0.1)
Adjustment to reserves for share based payments 0.8 0.9
Dividends paid to shareholders (13.3) (8.7)
------------------------------------------------- ----- -----
Net assets at 31 December 810.3 758.8
------------------------------------------------- ----- -----
As at 31 December 2013 net assets of GBP810.3 million were
GBP51.5 million higher than at the start of the year. Inventories
increased during the year by GBP107.4 million to GBP971.0 million.
The value of residential land, the key component of inventories,
increased by GBP84.2 million, as the Group invested ahead of usage.
At the end of 2013, the remaining provision held against land
carried at net realisable value was GBP19.9 million, after
utilisation of GBP8.7 million during the year. Other movements in
inventories were an increase in work in progress of GBP29.5
million, offset by a decrease in part exchange properties of GBP6.3
million.
Trade and other receivables reduced by GBP23.1 million, with a
reduction in debtors related to land sales of GBP12.7 million and
lower amounts owing from housing associations. Available for sale
financial assets held as current assets at 2012 year end of GBP7.2
million, relating to units held in an investment fund into which
the Group sold show home properties, were fully recovered during
2013. Trade and other payables totalling GBP242.6 million (2012:
GBP249.3 million) comprised land creditors of GBP123.8 million
(2012: GBP123.8 million) and trade and other creditors of GBP118.8
million (2012: GBP125.5 million). Net assets per share as at 31
December 2013 were 604p (2012: 567p).
Pensions
Taking into account the latest estimates provided by the Group's
actuarial advisors, the Group's pension scheme on an IAS19R basis
had a surplus of GBP3.2 million at 31 December 2013 (2012*: deficit
of GBP3.2 million). Scheme assets grew over the year to GBP94.7
million from GBP85.2 million and the scheme liabilities increased
to GBP91.5 million from GBP88.4 million. Scheme assets benefited
from a GBP2.8 million special cash contribution made by the Group
in December 2013.
As at 30 June 2013, an actuarial valuation was undertaken on
behalf of the pension scheme trustee, which showed a deficit of
GBP12.8 million at that date. The difference to the IAS19R basis
results from more conservative assumptions on discount rate and
mortality, as well as the additional special cash contribution of
GBP2.8 million made during December 2013. A new schedule of
contributions is in the process of being agreed between the Group
and the pension scheme trustee.
Net cash and cashflow
Having started the year with a net cash balance of GBP18.8
million, the Group generated an operating cash inflow before land
expenditure of GBP204 million (2012: GBP130 million), demonstrating
the strong underlying cash generation from the Group's existing
assets. Net cash payments for land investment were GBP203 million
(2012: GBP139 million). Non-trading cash outflow was GBP38 million.
As at 31 December 2013 the Group's net debt balance was GBP18.0
million with GBP12.0 million of cash in hand, offset by a drawn
term loan of GBP25.0 million, GBP4.8 million of loans received from
the Government and GBP0.2 million being the fair value of an
interest rate swap.
At the 31 December 2013, the Group had in place a committed
revolving credit facility of GBP175 million, of which GBP50 million
expires in December 2015 and GBP125 million in March 2017.
Additionally the Group had a fully drawn three year term loan of
GBP25 million, repayable in January 2016.
Bovis Homes Group PLC
Group income statement
For the year ended 31 December 2012
2013 restated
- note 3
GBP000 GBP000
---------------------------------------- -------- ---------
Revenue 556,000 425,533
Cost of sales (425,693) (328,634)
---------------------------------------- -------- ---------
Gross profit 130,307 96,899
Administrative expenses (47,476) (40,186)
---------------------------------------- -------- ---------
Operating profit before financing costs 82,831 56,713
Financial income 2,815 2,203
Financial expenses (7,134) (5,926)
---------------------------------------- -------- ---------
Net financing costs (4,319) (3,723)
Share of profit of joint venture 283 254
Profit before tax 78,795 53,244
Income tax expense (18,727) (13,051)
---------------------------------------- -------- ---------
Profit for the period attributable
to equity holders of the parent 60,068 40,193
---------------------------------------- -------- ---------
Earnings per share
---------------------------------------- -------- ---------
Basic 44.9p 30.2p
Diluted 44.8p 30.1p
---------------------------------------- -------- ---------
Group statement of comprehensive income
For the year ended 31 December 2012
2013 restated
- note 3
GBP000 GBP000
------------------------------------------------------- ------ ---------
Profit for the period 60,068 40,193
Other comprehensive income
Items that will not be reclassified to profit
and loss:
Actuarial gains / (losses) on defined benefit
pension scheme 3,693 (3,500)
Deferred tax on actuarial movements on defined
benefit pension scheme (748) 797
Total comprehensive income for the period attributable
to equity holders of the parent 63,013 37,490
------------------------------------------------------- ------ ---------
Bovis Homes Group PLC
Group balance sheet
At 31 December 2012
2013 restated
- note 3
GBP000 GBP000
------------------------------------ --------- ---------
Assets
Property, plant and equipment 13,526 11,910
Investments 5,089 5,387
Restricted cash 1,823 1,152
Deferred tax assets 1,451 2,881
Trade and other receivables 1,560 1,930
Available for sale financial assets 44,844 43,869
Retirement benefit asset 3,237 -
Total non-current assets 71,530 67,129
------------------------------------ --------- ---------
Inventories 971,016 863,597
Trade and other receivables 41,713 64,844
Available for sale financial assets - 7,119
Cash and cash equivalents 12,025 24,396
Total current assets 1,024,754 959,956
------------------------------------ --------- ---------
Total assets 1,096,284 1,027,085
------------------------------------ --------- ---------
Equity
Issued capital 67,048 66,908
Share premium 213,428 212,550
Retained earnings 529,786 479,391
------------------------------------ --------- ---------
Total equity attributable to equity
holders of the parent 810,262 758,849
------------------------------------ --------- ---------
Liabilities
Bank and other loans 30,064 5,606
Other financial liabilities - 706
Trade and other payables 29,631 50,681
Retirement benefit obligations - 3,171
Provisions 2,052 1,668
------------------------------------ --------- ---------
Total non-current liabilities 61,747 61,832
------------------------------------ --------- ---------
Trade and other payables 212,926 198,620
Other financial liabilities 784 -
Provisions 1,411 2,065
Current tax liabilities 9,154 5,719
Total current liabilities 224,275 206,404
------------------------------------ --------- ---------
Total liabilities 286,022 268,236
------------------------------------ --------- ---------
Total equity and liabilities 1,096,284 1,027,085
------------------------------------ --------- ---------
These financial statements were approved by the Board of
directors on 21 February 2014.
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 2012 449,671 66,836 212,064 728,571
Total comprehensive income
and expense 37,490 - - 37,490
Issue of share capital - 72 486 558
Deferred tax on other employee
benefits 33 - - 33
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 2013 479,391 66,908 212,550 758,849
Total comprehensive income
and expense 63,013 - - 63,013
Issue of share capital - 140 878 1,018
Deferred tax on other employee
benefits (23) - - (23)
Share based payments 766 - - 766
Dividends paid to shareholders (13,361) - - (13,361)
Balance at 31 December
2013 529,786 67,048 213,428 810,262
------------------------------- --------- ------- ------- -------
Bovis Homes Group PLC
Group statement of cash flows
For the year ended 31 December 2013 2012
GBP000 GBP000
------------------------------------------- --------- --------
Cash flows from operating activities
Profit for the year 60,068 40,193
Depreciation 1,180 906
Impairment of available for sale financial
assets (47) 889
Financial income (2,815) (2,203)
Financial expense 7,134 5,926
Profit on sale of property, plant and
equipment (24) (14)
Equity-settled share-based payment
expense 766 861
Income tax expense 18,727 13,051
Share of result of joint venture (283) (254)
Decrease / (increase) in trade and
other receivables 28,737 (3,587)
Increase in inventories (107,419) (65,841)
(Decrease) / increase in trade and
other payables (4,911) 1,093
Decrease in provisions and retirement
benefit obligations (2,845) (2,401)
------------------------------------------- --------- --------
Cash generated from operations (1,732) (11,381)
Interest paid (5,781) (1,707)
Income taxes paid (14,634) (9,922)
------------------------------------------- --------- --------
Net cash from operating activities (22,147) (23,010)
------------------------------------------- --------- --------
Cash flows from investing activities
Interest received 269 773
Acquisition of property, plant and
equipment (2,802) (1,213)
Proceeds from sale of plant and equipment 30 25
Movement in loans with Joint Venture 360 -
Dividends received from Joint Venture 267 243
Investment in restricted cash (671) (493)
Net cash from investing activities (2,547) (665)
------------------------------------------- --------- --------
Cash flows from financing activities
Dividends paid (13,361) (8,664)
Proceeds from the issue of share capital 1,018 558
Increase in borrowings 24,666 -
Net cash from financing activities 12,323 (8,106)
------------------------------------------- --------- --------
Net decrease in cash and cash equivalents (12,371) (31,781)
Cash and cash equivalents at 1 January 24,396 56,177
------------------------------------------- --------- --------
Cash and cash equivalents at 31 December 12,025 24,396
------------------------------------------- --------- --------
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 2013 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 21 February 2014. The financial statements were
audited by KPMG LLP.
The financial information set out above does not constitute the
company's statutory financial statements for the years ended 31
December 2013 or 2012 but is derived from those financial
statements. Statutory financial statementsfor 2012 have been
delivered to the registrar of companies, and those for 2013 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 financial 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
The Group has adopted IAS19 (Revised 2011) "Employee Benefits",
which outlines the accounting requirements or employee benefits.
The application of IAS19 (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 has been
restated with profit being GBP0.7 million lower and other
comprehensive income GBP0.7 million higher including the tax impact
of the changes. The impact on both basic and diluted earnings per
share was a reduction of 0.5 pence. The Group records actuarial
adjustments immediately so there has been no effect on the prior
year pension deficit.
Other than IAS19R, 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
2013 2012
GBP000 GBP000
----------------------------------- ------- -------
Net decrease in net cash and cash
equivalents (12,371) (31,781)
Increase in borrowings (24,546) -
Fair value adjustments to interest
rate swaps 209 (9)
Fair value adjustment to interest
free loans (121) (195)
Net cash at start of period 18,790 50,775
----------------------------------- ------- -------
Net (debt) / cash at end of period (18,039) 18,790
----------------------------------- ------- -------
Analysis of net cash:
Cash and cash equivalents 12,025 24,396
Unsecured loans (29,856) (5,190)
Fair value of interest rate swaps (208) (416)
Net cash (18,039) 18,790
----------------------------------- ------- -------
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 23.25% 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:
2013 2012
GBP000 GBP000
Prior year final dividend per share
of 6.0p (2012: 3.5p) 8,010 4,663
Current year interim dividend per share
of 4.0p (2012: 3.0p) 5,351 4,001
---------------------------------------- ------ ------
Dividends declared 13,361 8,664
---------------------------------------- ------ ------
The Board has decided to propose a final dividend of 9.5p per
share in respect of 2013.
7 Earnings per share
Basic earnings per share
The calculation of basic earnings per share at 31 December 2013
was based on the profit attributable to ordinary shareholders of
GBP60,068,000 (2012: GBP40,193,000) and a weighted average number
of ordinary shares outstanding during the year ended 31 December
2013 of 133,643,311 (2012: 133,294,726), calculated as follows:
Profit attributable to ordinary shareholders
2013 2012
GBP000 GBP000
------------------------------------ ------- -------
Profit for the period attributable
to ordinary shareholders 60,068 40,193
Weighted average number of ordinary shares
2013 2012
------------------------------------- ------------ ------------
Issued ordinary shares at 1 January 133,294,726 132,860,480
Effect of own shares held (288,388) (445,306)
Effect of shares issued in year 636,973 879,552
------------------------------------- ------------ ------------
Weighted average number of ordinary
shares at 31 December 133,643,311 133,294,726
------------------------------------- ------------ ------------
Diluted earnings per share
The calculation of diluted earnings per share at 31 December
2013 was based on the profit attributable to ordinary shareholders
of GBP60,068,000 (2012: GBP40,193,000) and a weighted average
number of ordinary shares outstanding during the year ended 31
December 2013 of 133,933,279 (2012: 133,432,911).
The average number of shares is increased by reference to the
average number of potential ordinary shares held under option
during the period. This reflects 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)
2013 2012
---------------------------------------- ------------ ------------
Weighted average number of ordinary
shares at 31 December 133,643,311 133,294,726
Effect of share options in issue which
have a dilutive effect 289,968 138,185
---------------------------------------- ------------ ------------
Weighted average number of ordinary
shares (diluted) at 31 December 133,933,279 133,432,911
---------------------------------------- ------------ ------------
8 Circulation to shareholders
The consolidated financial statements will be sent to
shareholders on or about 24 March 2014. 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 24 February 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TBMPTMBATBFI
Vistry (LSE:VTY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Vistry (LSE:VTY)
Historical Stock Chart
From Jul 2023 to Jul 2024