TIDMBVS
RNS Number : 8555E
Bovis Homes Group PLC
09 July 2019
9 July 2019
BOVIS HOMES GROUP PLC
Strong first half performance
Bovis Homes Group PLC (the 'Group') is issuing a trading update
for the six month period ended 30 June 2019 ahead of reporting its
half year results on 10 September 2019.
Greg Fitzgerald, Chief Executive commented:
"I am very pleased to report an excellent first half performance
across the Group and in particular, a significant improvement in
profitability, a strong cash position and a step up in our sales
rate compared to the same period last year. We have had another
controlled period, focused on delivering high quality homes and we
are currently trending at a 5-star HBF customer satisfaction
rating. We start the second half with a strong forward sales
position and expect to deliver an improved performance in
2019."
First half performance
We are pleased to report a 15% increase in our average private
sales rate per site per week in the period to 0.6 (2018: 0.52),
reflecting a step change in the Group's performance and stable
market demand.
The Group delivered a total of 1,647 (2018: 1,580) completions
in the half year, a 4% increase on the prior year. Of this 1,031
(2018: 1,030) were private units and 616 (2018: 550) affordable.
Whilst we saw an increase in the percentage of affordable homes in
the half, our expectation for the full year is that affordable will
remain a similar proportion of total completions as in 2018.
The Group's private average selling price in the period
increased to c. GBP342,000 (2018: GBP334,700), driven by an
improved geographical spread of sales outlets with overall
underlying pricing remaining broadly flat. Total average selling
price increased by c. 3% to c. GBP270,000 (2018: GBP262,700).
We opened 10 new developments in the half and operated from an
average of 88 active sites. We expect to open a further 13 new
sites this year, with our average active sites for 2019 at a
similar level to the prior year (2018: 87).
We have made good progress with the roll-out of our new Phoenix
housing range and have completed the majority of replanning on
existing sites. We saw the first legal completions from our new
housing range during June and with excellent customer feedback,
remain confident our new house types will deliver an enhanced sales
proposition for our customers, improved build efficiency and a
reduction in build costs.
Our overall improved cost control continues and alongside our
margin initiatives, this is offsetting the impact of flat pricing
and build cost inflation. Whilst cost inflation was running around
3% to 4% in the early part of the year we have seen reducing
pressure more recently.
Quality and customer service
We are pleased to report another controlled and disciplined
period end with our focus firmly on delivering high quality new
homes and excellent customer service. Following our award of a
4-star HBF Customer Satisfaction rating in March, we continue to
see improvement in the Group's score which is trending at above
90%, a 5-star rating for the new HBF year from 1 October 2018, with
the majority of responses submitted.
We also continue to see an improvement in all our on site
quality metrics and are delighted that six of our site managers and
their teams have been awarded NHBC Pride in the Job Quality Awards
this year.
Land
We have excellent visibility on our land supply with all of the
units for 2020 secured. We continue to see good opportunities in
the land market that at least meet our minimum hurdle rates and
have acquired 1,164 plots across 9 sites in the year to date. We
have good momentum on strategic land and in the year to date pulled
through 403 plots on 3 sites from our strategic land bank. We
continue to invest in our future strategic land supply and have
entered into 3 new option agreements in the year to date for a
total of c. 265 plots, with a strong pipeline for the second
half.
Partnerships
In February, we announced the development of our Partnerships
Housing division with a land led strategy, reflecting the quality
of our strategic landbank. We continue to strengthen our
relationships with housing associations and in April were delighted
to have completed our joint venture at Stanton Cross,
Wellingborough, with Riverside Housing Association. Building on our
strong relationships, we concluded land led deals in the period
with Vivid Housing Association at our development at North
Whiteley, and with Orbit Housing Association at our development in
Gravesend. We have seen an increase in our level of private sales
to housing associations in the period. These are units that are
well advanced in production and are typically for shared
ownership.
In addition, early July saw the conclusion of a further land led
partnership in respect of our development in Exeter, to jointly
develop around 700 new homes with Live West Housing
Association.
Balance sheet
The Group balance sheet has further strengthened in the period
with a net cash position as at 30 June 2019 of c. GBP103m (30 June
2018: GBP42.8m). Following completion of the joint venture at
Stanton Cross, Wellingborough, the Group has achieved in excess of
GBP250m from its initiatives set out in 2017 to optimise its
balance sheet, significantly exceeding the original GBP180m
target.
Outlook
Market fundamentals remain stable and despite the ongoing
uncertainty surrounding Brexit, we continue to see good demand for
our new homes across all our operating regions. We start the second
half of the year with a strong forward sales position and are
confident of delivering completions in line with our expectations
for the year.
The Group continues to make significant progress and expects to
deliver an improved operational and financial performance in this
full year.
Certain statements in this press release are 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 representative on
that such trends, results or activities will continue in the
future. Undue reliance should not be placed on forward looking
statements.
For further information please contact:
Bovis Homes Group PLC
Earl Sibley, Group Finance Director
Susie Bell, Head of IR 01732 280272
Powerscourt
Justin Griffiths
Nick Dibden 020 7250 1446
Notes to Editors:
Bovis Homes, the FTSE 250 listed house builder, is a UK builder
of high quality, traditional homes, ranging from two-bed starter
properties through to large five-bed family homes, with the design
and construction blending tradition with innovation, and creating
quality dwellings and developments with contemporary living
standards.
For the year ended 31 December 2018 the Group completed on 3,759
homes.
In April 2018, Bovis Homes launched its new housing range of 28
new house types for both private and affordable housing. The
Phoenix housing range is designed to meet today's customers' needs
including more open plan living, larger bedrooms and better
storage. It also reflects a complete construction specification
review to ensure time, material and labour efficient designs.
Customer satisfaction is central to the Group and is reflected
in the award of 4 stars by the HBF in its annual customer
satisfaction survey results published in March 2019.
For further information, please visit the Group's website:
https://www.bovishomesgroup.co.uk/
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END
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