16th Jan 2019 08:52
LONDON (Alliance News) - Bovis Homes Group PLC said on Wednesday profit for 2018 is expected slightly ahead of market forecasts after the housebuilder made some "significant" operational improvements.
Shares in Bovis Homes were up 4.0% at 964.20 pence each on Wednesday, among the best performers in the FTSE 250.
The homebuilder said it delivered a total of 3,759 new homes in 2018, a 3.1% increase on the 3,645 built last year. Private homes built decreased slightly to 2,567 from 2,573 but affordable homes increased 11% to 1,192 from 1,072.
The year-on-year rise in new homes built was in line with Bovis Homes' expectations.
Bovis said it will recommend a 38.0 pence final dividend, a 17% increase on last year's payout of 32.5p. As a result, the homebuilder's total dividend for 2018 will increase 20% to 57.0p from 47.5p. Including the 45.0p special dividend paid in November, Bovis' total dividend will be 102.0p.
Bovis Homes said the average selling price on completions during the year was around GBP273,000, up slightly from GBP272,400 last year. The average selling price for private homes increased 1.0% to GBP338,000 from GBP334,500.
The homebuilder's sales rate per outlet per week in 2018 was 0.5, up from 0.48 last year.
Bovis Homes said its "strong" forward sales total 2,681 units, up from 2,656 last year, with a value of GBP521 million, increased slightly from GBP518 million.
"The significant improvement in operational performance across all areas of the business is expected to deliver a record year of profits for the group," said Chief Executive Officer Greg Fitzgerald.
The mid-cap firm that said, following the implementation of operational improvements over the last 18 months, it expects to deliver a "significant step-up" in its operating margin for 2018. Bovis said profit for the year is expected to be "slightly" ahead of market consensus.
Bovis acquired 4,164 plots of land in 2018, a significant increase on the 2,550 bought last year. The homebuilder said the increase will "maintain a good supply of high quality developments".
The company said that "industry fundamentals remain strong", with Bovis believing customer demand for new homes is supported by "attractive" mortgage finance and government initiatives, in particular Help to Buy.
The company said: "Whilst it is too early in the year to comment on 2019 trading, early signs are encouraging. As reported in November, we saw Brexit uncertainty driving a slowdown in discretionary buyers of our larger homes. In addition, our stronger operating model and margin initiatives will support the business."
Fitzgerald added: "We are looking forward to delivering the first homes from our new housing range in 2019 and continuing to make further operational and financial progress."
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