8th Nov 2013 11:04
LONDON (Alliance News) - Bovis Homes PLC Friday said it has achieved its target for private reservations for 2013 legal completions in September ahead of schedule, as net private reservations were 45% ahead in the same period in 2012.
In an interim management station for the period from July 1, the housebuilder said net private reservations achieved in the 44 weeks to November 1 stood at 2,390, up from the 1,650 it recorded in the same period in 2012.
Net reservations per site per week increased 30% during the period, Bovis said, averaging 0.60, compared with 0.46 in 2012, while the average number of active sales outlets rose 11%.
Bovis said it was surprised by the size of the increase, but attributed it to the quality of the sites it opened this year and the fact the company is now bigger than before, with more sales outlets.
"We knew that the quality of the sites we opened during the year would give us an improvement in sales rates," Chief Executive David Ritchie said in a telephone interview.
"What we didn't expect was the improvement to be as good as it has been. We are 30% up on the number of houses we are selling on each site per week, and while we would have expected that to be a positive number, 30% was better than we would have predicted.
Ritchie also said improved market conditions had helped the business.
"From the beginning of the year the market was showing signs of improvement, with banks prepared to lend, customers more confident, and the [UK] government's introduction of Help to Buy in April having a contributing effect," he said. "All this together has made the underlying market place stronger than we had anticipated."
The Kent-based firm, which posted a 19% increase in pretax profit to GBP18.6 million in its interim results in August, said it had followed its plan to accelerate the building of its private forward order book for 2014. It said this is now "materially" greater than the private forward order book on January 1.
Bovis also said it had added to its land bank, with an additional 3,330 plots on 22 sites, and a further 1,200 plots on 13 sites in the pipeline. A number of these are expected to be added to the consented land bank before the year end, it said.
In addition to this, the firm said it has a large number of plots under negotiation with land owners for contract either in late 2013 or 2014, with a significant proportion already with planning consent.
The group said it had net debt of GBP125 million, as of November 7 and, "given the phasing of housing receipts and land payments, the group expects to end 2013 with a modest net debt position".
Looking ahead Bovis said, with improved overhead efficiency, its operating margin for 2013 is expected to approach 15%, ahead of the 13.4% it achieved in 2012.
Bovis Homes shares were up 2.2% at 778.50 pence early Friday.
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