Trading Update (0083K)
08 July 2011 - 4:00PM
UK Regulatory
TIDMBVS
RNS Number : 0083K
Bovis Homes Group PLC
08 July 2011
8 July 2011
Bovis Homes Group PLC
Trading update
Solid trading on increasing sales outlets with margins
improving
The Group is today issuing a trading update covering the six
month period ended 30 June 2011 ahead of reporting its half year
results, due to be announced on Tuesday, 30 August 2011.
Trading
Operating in a stable market, the Group has achieved 802 net
private reservations in the first six months (2010: 691), a 16%
increase. The net private sales rate per site per week was 0.45 (H1
2010: 0.42) with sales prices achieved to date in line with the
Group's expectations.
For the six months ended 30 June 2011 the Group legally
completed 801 homes, compared to 803 homes in the same period in
2010. The 2010 legal completions benefited from the sale of 215
units into a private rental joint venture. The average sales price
increased by circa 3% year on year and the housing gross margin was
circa 20% (H1 2010: 16.6%). The Group expects to deliver an
operating margin for the half year of at least 7% (H1 2010:
4.2%).
As a result of the Group's assertive land investment since the
housing market downturn, the Group anticipates launching a total of
33 sales outlets during 2011, of which 19 opened in the first half
of the year. The Group expects the average number of sales outlets
will be 73 for the full year (2010: 66).
Cumulative reservations expected to legally complete in 2011,
including social housing units, stood at 1,333 homes at 30 June
2011 (30 June 2010: 1,474 homes, including the 215 private rental
joint venture homes).
Positively, the Group has recently received confirmation of
funding for 446 homes under the Government's FirstBuy Scheme. This
will provide assistance in delivering first time buyer home sales
during the second half of 2011 and into 2012.
Land management
The Group continues to take advantage of opportunities to
acquire high quality consented land. In the six months ended 30
June 2011, 1,571 consented plots have been added on 9 new sites,
85% of the plots being in the south of England. This land is
anticipated to deliver revenue, based on current sales prices and
current build costs, of GBP339 million at a gross margin above 25%.
Terms have been agreed in principle on a further 20 sites,
representing an additional circa 2,500 plots, the vast majority of
which are located in the south of England. Of the total of circa
4,000 plots acquired or with terms agreed, approximately 35%
relates to conversion of strategic land.
Progress is also being made to sell plots on selected sites,
particularly those which have a longer trade out period by virtue
of their size. One land sale has completed in the first half of
2011 with two further contracted land sales expected to complete in
the second half of 2011. Terms have been agreed on a further two
land sales expected to complete in 2011.
Balance sheet
The Group has retained a prudent balance sheet with work in
progress tightly managed and net cash of GBP46 million as at 30
June 2011. Deferred payment terms on new land acquisitions are
being negotiated to contribute to the achievement of strong returns
on capital employed. The Group's balance sheet management, cash
resources and flexible banking arrangements support the
continuation of the consented land investment programme.
Outlook
Commenting on the outlook, Chief Executive David Ritchie
said:
"On the basis of the current stable market conditions
continuing, the Group remains confident that it can deliver on its
expectations for 2011 and will continue to invest to increase
output capacity to deliver higher returns to shareholders."
Enquiries: David Ritchie, Chief Executive
Jonathan Hill, Finance Director
Bovis Homes Group PLC
Tel: 07855 432 699
Andrew Jaques/Reg Hoare/James White/Giles Robinson
MHP Communications
Tel: 0203 3128 8100
Conference Call for analysts
David Ritchie, Chief Executive, and Jonathan Hill, Finance
Director, of Bovis Homes will host a conference call at 09:00am
today, Friday 8 July 2011, to discuss this trading statement. To
access the call please dial 0800 368 1950 and quote passcode:
970064#. Please dial in 5 minutes prior to the start of the
conference call to allow time for registration. A recording of the
conference call will be available until midnight on Friday 15 July
2011, commencing approximately 30 minutes after the live call has
finished, on: 0800 368 1890, access code: 378232#.
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***
Certain statements may be forward looking statements. Forward
looking statements involve evaluating a number of risks,
uncertainties or assumptions that could cause actual results to
differ materially from those expressed or implied by those
statements. Forward looking statements regarding past trends,
results or activities should not be taken as a representation that
such trends, results or activities will continue in the future.
Undue reliance should not be placed on forward looking
statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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