TIDMBVS
RNS Number : 7605X
Bovis Homes Group PLC
16 January 2014
16 January 2014
Bovis Homes Group PLC
Trading Update
Strong increase in returns in 2013: material growth in forward
order book for 2014
Bovis Homes Group PLC is today issuing the following trading
update ahead of reporting its final results for the year ended 31
December 2013 on Monday 24 February 2014.
Significant revenue and profits growth
The Group expects to announce a significant increase in profit
before tax for 2013, in line with market expectations, driven by
the compound positive effect of:
-- a 19% growth in legal completions to 2,813 (2012: 2,355),
including a 26% increase in private homes to 2,330 (2012:
1,854);
-- an increase of 14% in the Group's average sales price to
GBP195,100 (2012: GBP170,700), primarily due to an improved mix of
larger homes with a greater proportion of higher value Southern
sites; and,
-- a significant improvement in operating profit margin to
approaching 15% (2012*: 13.3%), driven both by an increasing
contribution from legal completions on sites acquired since the
housing market downturn and by improving overhead efficiency.
The strong growth in profitability will enable the Group to
achieve its anticipated material improvement in ROCE to in excess
of 10% for 2013 (2012: 7.7%).
* Adjusted for IAS19R
Substantial land investment
During 2013, the Group added 3,737 plots to the consented land
bank on 27 sites. Additionally, circa 2,800 plots on 12 sites were
contracted at the year end and are expected to be added to the
consented land bank during the early months of 2014, as conditions
are satisfied. At the end of 2013, the Group's land bank stood at
14,638 consented plots, providing over five years of land supply at
2013 volume levels.
Robust balance sheet
As expected, the Group had net debt of GBP18 million at the year
end, having started 2013 with GBP19 million of net cash, reflecting
the Group's significant land investment during the year.
Positive current trading and outlook
Trading has continued to be robust in the latter months of 2013
and this momentum has been maintained into the opening weeks of
2014.
The Group achieved 2,773 net private reservations in 2013, 48%
ahead of the 1,873 achieved in 2012. Net reservations per site per
week increased by 34% to 0.59 (2012: 0.44). Active sales outlets
during 2013 averaged 90, 10% ahead of 2012's average of 82.
As at 1 January 2014, the Group held 1,377 forward sales for
2014 delivery, 77% ahead of the 778 forward sales at the start of
2013. Of these, 692 were private homes, 178% ahead of the 2013
opening position of 249. The Group also had 685 social housing
reservations for 2014 legal completion, compared to the 529 social
homes reserved at the start of 2013.
The Group started this year with 94 active sales outlets. With
the land purchases made to date and the continuation of investment
in both consented and strategic land, the Group expects to grow its
active sales outlets further during 2014.
The combined effect of the strong forward order book, the
expected growth in active sales outlets and an improving average
sales price will enable the Group to continue to drive revenue
growth, assuming stable market conditions. With improving profit
margins, the Group's profits and ROCE are both expected to show
further strong improvement in 2014.
Commenting, David Ritchie, Chief Executive of Bovis Homes,
said:
"2013 was another successful year for Bovis Homes. We delivered
significant growth in profits and returns as a result of our
continued strategy of growth through investment in high quality
consented and strategic land. Our forward order book is in its best
position for many years.
"With further increases in active sales outlets supported by
ongoing assertive land buying, the Group is confident of its future
prospects and ability to deliver further significant improvement in
returns."
Conference call for analysts and investors
David Ritchie, Chief Executive and Jonathan Hill, Group Finance
Director of Bovis Homes will host a conference call at 08:30am
today, Thursday 16 January 2014 to discuss the trading update.
To access the call please dial +44 (0)20 3139 4830 and enter
pincode 32081377# when prompted. Please dial in five 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 Thursday 6 February 2014. To access the playback facility,
please dial 020 3426 2807 and enter conference reference 645143#
when prompted.
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.
-ENDS-
Enquiries:
David Ritchie, Chief Executive
Jonathan Hill, Group Finance Director
Bovis Homes Group PLC
Tel: 01474 876200
Reg Hoare, James White, Giles Robinson
MHP Communications
Tel: +44 (0)20 3128 8100
This information is provided by RNS
The company news service from the London Stock Exchange
END
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