Builder reports housing market bottoming out
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Britain's housing market appears to be bottoming out
after Bovis, the Kent-based housebuilder, reported a steep increase
in reservations.
Bovis, based in New Ash Green, said private home reservations
had risen by 92 per cent in the first half of 2009.
Legal completions grew by 18 per cent to 738, although the
average price for private homes was £160,400, compared to £196,700
in the first six months of 2008.
The company said that the housing market showed signs of
stabilisation, with a slowing in
he rate of house price decline. The number of mortgage approvals
had increased, albeit from a low base.
However, the number of transactions remained at “historically
low levels,” with pricing “substantially below” the peak levels of
2007.
The outlook for the market was a continuation of relatively low
levels of activity.
Although half-year revenue was lower than the same period in
2008 - down 18 per cent from £149.3m to £122.6m - it made a
pre-exceptional profit of £1.2m. Costs were reduced by 48 per cent
as the company has shed jobs in the past ear.
David Ritchie, chief executive, said the group had made good
progress during the first half of 2009. It had generated £94m of
cash inflow and cut net debt to £14m.
“The Group is well positioned now to take advantage of an
increasing number of opportunities to invest in new consented
residential land assets,” he said.
But he acknowledged that rising unemployment and uncertainty
about the future of the economy made it important for the company
to show caution.
Ed Woolfitt, head of trading at Galvan Research, said Bovis
provided ample evidence of a bottoming out in the housing market.
Results were in line with others in the sector such as Bellway and
Taylor Wimpey earlier this month, August.
“Galvan Research still believe the momentum is very much with
housebuilders and construction companies as recovery plays,” it
said. “Consequently we still view the shares as a buy.”
Monday, August 24 2009
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