6th Sep 2018 09:43
LONDON (Alliance News) - Housebuilder Bovis Homes Group PLC said on Thursday that profit rose ahead of expectations in the first half of 2018, amid a higher gross margin on sales.
The results prompted Bovis to declare a special dividend, and the stock was up 5.1% at 1,189.50 pence on Thursday morning following the announcement, the second best performer in the FTSE 250 index.
Bovis reported pretax profit for the six months to the end of June rose to GBP60.2 million from GBP42.7 million a year before, due to the gross margin rising by 280 basis points to 20.9% from 18.1%.
This reflected controlled delivery and the underlying margin in Bovis Homes' land bank.
Revenue for the period grew 1.0% to GBP432.2 million from GBP427.8 million.
Total completions in the period rose by 4.0% to 1,580 from 1,512, however the total average selling price fell to GBP262,700 from GBP277,400, due to a higher percentage of affordable completions, but a dip in private completions.
During 2017, Bovis Homes had slowed down its rate of production in order to reset its business and address operational issues within the company. One of the results of the reset was the launch of the Phoenix Collection in April, a new housing range.
Some 61 developments are in the process of being re-planned as Phoenix, with the first completions expected in the spring of 2019.
The group declared an interim dividend of 19 pence per share, up 27% from 15p the year before.
Alongside the interim dividend, Bovis Homes will pay a special dividend of 45 pence per share, which it said was part of its intention to return GBP180 million in surplus cash to shareholders in the three years to 2020.
For the year to date, Bovis Homes said it has a strong sales position, with 96% of 2018 sales secured, and profits for the full year is set to be at the top end of management expectations.
"We delivered a strong performance in the half with a more than 40% increase in profits. This reflects the excellent progress made across all business areas over the past 18 months and a step change in the quality of the homes we are building and level of service we are providing our customers. We are confident in the outlook for the business and are targeting a record year of profits in 2018, at the top end of the board's expectations," said Chief Executive Greg Fitzgerald.
Related Shares:
Bovis Homes