TIDMBVS
RNS Number : 2018S
Bovis Homes Group PLC
06 July 2015
6 July 2015
Bovis Homes Group PLC
Trading update
On track to deliver further growth in shareholder returns
The Group is today issuing a trading update for the six month
period ended 30 June 2015 ahead of reporting its half year results
due to be announced on Monday, 17 August 2015.
Highlights
-- Record half year volume of legal completions at 1,525 new homes (H1 2014: 1,487)
-- Average sales price on legal completions increased by 6% to
GBP222,000 (H1 2014: GBP210,000)
-- Cumulative reservations achieved to 30 June 2015 and expected
to legally complete in 2015 of 3,505 homes (30 June 2014:
3,297)
-- 2,944 consented plots of land across 17 new sites approved for purchase in H1 2015
-- Intention to increase the interim dividend for 2015 by 14% to
13.7 pence per share (H1 2014: 12.0 pence per share)
David Ritchie, Chief Executive, commented:
"The Group has delivered a record number of first half legal
completions, made possible by the high quality land investments
made during the last few years.
We continue to trade well in a positive UK housing market
delivering a strong forward sales and build position on an
increased number of sales outlets. As a result we are on track to
deliver our expected growth for 2015 and a further increase in
return on capital employed supported by robust profit margins and
improved capital turn.
Future growth in shareholder returns is being underpinned by
further disciplined investment in new consented and strategic
land."
Half year results and current trading
The Group has delivered a record half year volume of 1,525
homes, a 3% increase on the prior year. As previously guided in May
of this year, the Group's legal completion profile in 2015 is
expected to be more weighted to the second half of the year than
was the case in the prior year (H1 2014: 41%). Given the higher
proportion of traditional family homes along with robust housing
market conditions, the Group's average private sales price
increased to GBP264,000, 10% ahead of the comparative of GBP240,000
in H1 2014. Overall, including the increased share of social
housing, the Group's average sales price increased by 6% to
GBP222,000 (H1 2014: GBP210,000).
The Group has been trading from an average of 100 sales outlets
during the year to date which represents an 8% increase on the
comparative period. Weekly private sales rates to date have
remained robust at an average of 0.63 net private reservations per
site against the strong comparative in 2014 of 0.65. The total
forward sales position for 2015 delivery, including legal
completions to date, stood at 3,505 homes at 30 June 2015 (30 June
2014: 3,297). Housing production is currently 13% ahead of the
prior year which provides a strong base for the planned volume
growth for 2015. The Group remains on track to deliver its expected
total volume of legal completions for 2015.
Land
The Group has continued to take advantage of a positive land
market to acquire high quality land at above hurdle rate margins
and returns, with a focus on traditional housing sites mainly in
the south of England (outside of central London). In the first half
of 2015, the Group added 2,687 consented plots on 15 sites to the
land bank and has approved for purchase two further consented sites
contributing 257 plots which are expected to be added in early
July. Beyond this there is in place a strong pipeline of land with
terms agreed to deliver the targeted level of around 40 new site
acquisitions during 2015. The Group continues to be disciplined in
its approach to land acquisition with robust hurdle rates and no
allowance for future house price inflation included in its land
appraisals. The average expected return on capital employed on land
acquired to date this year is circa 28%.
The Group is pleased with the progress being made on a number of
its significant strategic land holdings. These are expected to
provide a valuable source of development land, primarily in the
south of England, as planning consents are achieved. In particular,
the Group has either secured or is in the final stages of securing
planning consent on four major strategic sites at Bishops Stortford
(where the first 180 plots have already been added to the consented
land bank), North Wokingham, Witney, and Tavistock. In total these
sites will deliver over 2,000 future consented plots to the land
bank with high profit margins and returns above existing hurdle
rates.
Balance sheet
Given the significant investment in consented land in the first
half year, the Group had net debt of approximately GBP60 million as
at 30 June 2015 (31 December 2014: net cash of GBP5 million, 30
June 2014: net debt of GBP48 million).
Interim dividend
The Board has previously reported its aim to step up the full
year dividend for 2015 to 40 pence per share and is now pleased to
confirm that it intends to declare an interim dividend for 2015 of
13.7 pence per share, an increase of 14% on the prior year (H1
2014: 12.0 pence per share).
Outlook
The Group remains on track to achieve its expectations for 2015
against a positive backdrop of robust market conditions.
The Group is executing its growth strategy with investment in
consented land, increased active sales outlets and robust rates of
delivery per site. Volume in 2015 is expected to grow in line with
active sales outlet growth and this, coupled with an increase in
average sales price is expected to deliver an increase in revenue
with capital turn in excess of one times. The increase in revenue
combined with a strong net profit margin positions the Group to
deliver a strong financial performance this year with a further
increase in return on capital employed.
Conference call for analysts and investors
David Ritchie, Chief Executive and Earl Sibley, Group Finance
Director of Bovis Homes will host a conference call at 08:30am
today, Monday 6 July 2014 to discuss this trading statement.
To access the call please dial +44 (0)20 3139 4830 and enter
pincode 57205740# 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 Tuesday 4 August 2015. To access the playback facility, please
dial 020 3426 2807 and enter conference reference 659088# 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
Earl Sibley, Group Finance Director
Bovis Homes Group PLC
Tel: 07584 515 937
Reg Hoare / James White / Giles Robinson / Charlie Barker
MHP Communications
Tel: 0203 3128 8540
This information is provided by RNS
The company news service from the London Stock Exchange
END
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