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Bovis defies housing downturn with profit hike

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Bovis Homes logo

Kent-based house-builder Bovis Homes has defied the downturn by hiking pre-tax profits by 74%.

They soared to £32.1m (2010: £18.5m) in the year ending December 31 on turnover up 22% to £264.8m (2010: £298.6m). The increase was mainly down to strong sales of family homes in the south of England.

The group, with a head office in New Ash Green, near Gravesend, achieved legal completions of 2,045 homes (2010: 1,901), a leap of 8%, with an average private sales price up 5% to £180,100 (2010: £172,300). Private reservations rose by 24% to 1,653. It announced a 5p dividend (2010: 3p).

Bovis reported private reservations in 2012 to date up 41%, with sales prices "modestly ahead" of expectations.

David Ritchie, chief executive, said: "The group has delivered a strong improvement in profit in 2011 against a challenging but stable market environment.

"This profit improvement has been delivered through the compound positive effect of increased volumes, improved sales prices and stronger margins."

He added that the group was well positioned for continued improving returns and "a strongly increasing return on capital".

Richard Curr, head of dealing at Prime Markets, said Bovis shares, which dipped to 313p in August had staged a remarkable recovery to a peak of 500p at the end of 2011.

"Bovis should be snapped up on any profit taking dips, with a 4-6 week price target of 527p."

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