25/02/13

Bovis Homes notches up huge rise in pre-tax profits

by business editor Trevor Sturgess

Housebuilder Bovis Homes Group hiked pre-tax profits by nearly 70% in “challenging” economic conditions last year.

The business based in New Ash Green, near Gravesend, reported today that annual profits before tax soared from £36.4m to £54.1m (69%), well ahead of market expectations. Sales revenue rose 17% to £424.5m.

The strong performance reflected 15% growth in house sales completed, up from 2,045 in 2011 to 2,355. Average sales price edged up 5% to £170,700 (2011 - £162,400).

Bovis said there was significant growth in future profit potential with 13,776 consented plots at the end of the financial year, with potential gross profit of £600m.

Since New Year’s Day, Bovis reported 350 private reservations in the first eight weeks of 2013 (2012: 320), an increase of 9%.

David Ritchie, chief executive, said: “The Group delivered strong growth in profit and return on capital employed in 2012 in a challenging but stable market environment. These improvements have been achieved through the compound positive effect of increased volumes, improved sales prices and stronger margins.

“Significant progress has also been made in positioning the Group for sustained improvements in future shareholder returns. After another year of substantial land investment in 2012, the Group expects to deliver a strong increase in active sales outlets in 2013. Assuming a continuation of stable market conditions, this will further enhance volumes, sales prices and profit margins.”