Bovis has posted a surge in pre-tax profits for the first half of the year, ahead of expectations, after stepping up its build quality.
- Strong H1 performance with £62m profit before tax, compared with 42.7m last year;
- Further strengthened balance sheet with a move to an average net cash position in the period of £6m (2017: average net debt £96m) and a period end net cash position of £42.8m (2017: net debt £32.4m);
- Interim dividend increased by 27% to 19 pence per share and first special dividend of 45 pence per share to be paid with the interim in November;
- Strong sales position with 96% of 2018 sales secured;
- Following robust summer trading and with increased visibility on margin improvement, the Group now expects profits for FY18 to be at the top end of the Board’s expectations;
- On track to deliver minimum of £180m total cash proceeds from balance sheet optimisation initiatives by end of 2018.
Greg Fitzgerald, Chief Executive said, “We delivered a strong performance in the half with a more than 40% increase in profits. This reflects the excellent progress made across all business areas over the past 18 months and a step change in the quality of the homes we are building and level of service we are providing our customers. We are confident in the outlook for the business and are targeting a record year of profits in 2018, at the top end of the Board’s expectations.”
“Improving our build standards and delivering these higher standards consistently across all our developments remains a key priority, and over the past 18 months we have invested in high quality construction directors, site managers and site teams. Our regional management teams have embedded a far greater ‘hands on’ approach and best practice is now promoted and shared across our seven regions.
“We have seen our NHBC reportable items decrease by 66% since December 2016, and they are now slightly lower than the industry average. We are proud to disclose that our recent NHBC Construction Quality Review highlighted a significant step up in our build quality and in ‘getting it right first time’, with the Group now aligned to industry standards.
“The market fundamentals remain strong and we continue to see good levels of demand for new homes across all our regions with underlying pricing firm. Interest rates continue to be at historic lows with good competition in the mortgage lending market. The Government remains committed to increasing the supply of new homes in the UK reflected in its policy on housing and planning and commitment to Help to Buy.”