17th Aug 2015 10:18
LONDON (Alliance News) - Bovis Homes Group PLC on Monday lifted its dividend, reported an 8.9% increase in pretax profit in the first half, and said it is on track to meet expected sales volumes in the year as a whole.
In a statement, the FTSE 250 housebuilder said it made a GBP53.8 million pretax profit in the six months to the end of June, compared with GBP49.4 million in the corresponding half the prior year, as revenue increased to GBP350.7 million from GBP322.1 million.
Bovis Homes increased its interim dividend per share to 13.7 pence from 12.0p, and said it intends to increase the full-year dividend to 40p from 35p.
The company said it completed 1,525 homes, compared with 1,487 in the corresponding period the prior year, at an average selling price of GBP264,000 when excluding private rental sector homes. It had 3,768 in cumulative sales to Friday last week for delivery in 2015, compared with 1,487 in the corresponding period the prior year, putting it on track for the full year.
"I am pleased to report that significant land opportunities continue to be available at higher returns meaning disciplined investment in consented land should underpin future growth in shareholder returns. With positive market conditions prevailing, we continue to assess the housing cycle and will adapt our strategy appropriately. We anticipate that the addition of around 40 sites per annum will support our medium-term growth strategy to deliver volumes of between 5,000 and 6,000 new homes each year," Chief Executive David Ritchie said in a statement.
"For 2015, we are on track to deliver our expected volume of new homes and remain confident in our outlook for the year as a whole. The combination of strong revenue growth and higher profit margins with improved capital efficiency will drive higher capital turn and return on capital employed," Ritchie added.
Shares had been trading at eight-year highs prior to the results, and were down 5.8% at 1,131.00 Monday morning.
Robin Hardy, an analyst at Shore Capital, said shares had been trading above their fair value of 1,141p. That prompted Shore Capital to put its Buy rating on the shares under review.
"As elsewhere in the sector we are highly unlikely to switch to a negative stance as we see the good yields available in the sector (although Bovis is materially less generous than many of its peers in terms of yield) and the continuing lack of marginal sellers it feels unlikely that the stock is likely to go into reverse," Hardy said in a morning note.
By Samuel Agini; [email protected]; @samuelagini
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