TIDMBVS
RNS Number : 6524T
Bovis Homes Group PLC
05 July 2018
5 July 2018
BOVIS HOMES GROUP PLC
Strong first half performance
Bovis Homes Group PLC (the 'Group') is issuing a trading update
for the six month period ended 30 June 2018 ahead of reporting its
half year results on 6 September 2018.
Greg Fitzgerald, Group CEO said
"We expect to deliver a significant step up in profitability for
the half year as we start to see the financial benefits from the
strategic direction, changes implemented, and specific margin
initiatives launched over the past 18 months. In addition, we have
delivered another disciplined and orderly period end with our
customer satisfaction score continuing to trend at well above
80%."
Current trading
The Group delivered a total of 1,580 (2017: 1,512) completions
in the half year, slightly ahead of our expectations and an
increase of 4% on the prior year. Of this 1,030 (2017: 1,140) were
private units and 550 (2017: 372) affordable. The higher percentage
of completions from affordable homes in the half reflects the
planned build programme across our developments. For the full year,
we continue to expect affordable to be a similar proportion of
total completions as 2017.
Our private average selling price in the period was c.
GBP335,000 (2017: GBP334,700), with underlying prices remaining
firm, some positive movement from our price optimisation initiative
launched in January, and a lower proportion of high-end product
compared to the prior year. Our total average selling price was c.
GBP261,000 (2017: GBP277,400), reflecting the higher contribution
from affordable content in the period.
The Group's sales rate for the half was up 8% to 0.52 (2017:
0.48) net private reservations per site per week. This rate
excludes the previously announced sale of 275 units to Heylo
Housing to be completed in 2018.
As planned, we opened 17 new sites in the period and operated
from an average of 86 (2017: 96) active sales outlets. We have a
further 6 new sites to launch in the next quarter, and expect our
average active sites number to increase in the second half.
Quality and customer service
Our half year period end was controlled and disciplined, with an
overriding focus on delivering a high level of customer service.
The Group's HBF Customer Satisfaction score (1 October 2017 to
date) continues to trend at well above 80%, a 4 star rating, with 3
of our regions trending at 5 star (90% and above)*.
We are delighted to announce that six Bovis Homes site managers
and their teams have been awarded NHBC Pride in the Job Quality
Awards. This is up from our two awards last year and in line with
the highest number for the Group since 2004.
Land
We continue to have very good visibility on our land supply with
98% of units for 2019 secured of which 92% have detailed planning
in place.
We have invested in our land teams during the first half and
this is already delivering progress with 828 plots secured across
five sites in the first half. In addition, we have terms agreed for
c. 1,200 plots on a further four open market sites and three
strategic conversions.
Our strategic landbank remains a valuable source of land. In the
first half we gained planning consent on a total of 678 plots and
we entered into five new options with a further new option
agreement well progressed.
Balance sheet
The Group balance sheet has further strengthened in the period
with a net cash position as at 30 June 2018 of c. GBP40m (2017: Net
debt GBP32.4m). We remain on track to deliver a total of at least
GBP180 million of additional cash into the business by December
2018 from our balance sheet optimisation programme.
In the period we made good progress in terms of our exit from
two PRS JV's including two bulk disposals. We continue to reduce
our part exchange holdings which are now c. GBP10m and have
significantly reduced our average holding time for properties.
Our discussions regarding joint ventures and the reduction of
our investment in our larger sites at Sherford, near Plymouth and
Wellingborough, continue to make progress and we expect to realise
c. GBP50m cash benefit from these transactions in this financial
year. We have invested in our work in progress during the first
half to deliver the higher proportion of private homes expected in
the second half, alongside the ongoing investment at Wellingborough
where we expect the first legal completions later this year.
Outlook
The housing market fundamentals remain robust, with good demand
for new homes across all our regions and underlying pricing
remaining firm. We are very pleased with the Group's first half
performance and are in a strong position to deliver upon our
expectations for the full year.
We are making clear progress towards our medium term targets
including a 23.5% gross margin and 25% return on capital employed
and believe our margin initiatives represent further potential for
the Group in the medium term.
* HBF National Survey of Housebuilders. Percentage based on
responses for the current survey year from 1 October 2017 to date.
Bovis Homes Group was awarded a 2 star rating (60.0% - 69.9%) for
the survey period covering the 12 months from October 2016 to
September 2017.
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 representative on
that such trends, results or activities will continue in the
future. Undue reliance should not be placed on forward looking
statements.
For further information please contact:
Bovis Homes Group PLC 01732 280272
Earl Sibley, Group Finance Director 07811 988617
Susie Bell, Head of IR
Maitland
Neil Bennett
James McFarlane 020 7379 5151
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END
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