Bovis Homes Group Plc Posts Strong First-Half Performance

Accelerating growth in returns is expected at Bovis Homes Group plc (LON:BVS).

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The share price of Bovis Homes (LSE: BVS) is currently up 1.5% following the publication of the company’s half-year results for 2013.

Pre-tax profit was up 19%, at £18.6m, on housing revenues that had risen 17%m to £183.2m.  The average sales price increased by 15%, up to £188,500, which the company said was “primarily due to mix” and was “modestly ahead of expectations”.  

Housing operating profit was up 50%, at £20.4m, and housing operating margin has increased 2.4 percentage points, from 8.7% in H1 2012, to 11.1%.  However, net debt now stands at £48.4m, compared with £22.2,m of net cash for H1 2012.

With earnings per share up 26%, to 10.8p, the company is increasing its interim dividend by 33%, to 4p per share.  Bovis Homes’  forward dividend now stands at just under 1.8%.

Commenting on the results, chief executive of Bovis Homes, said:

“The positive trading position, combined with an increasing proportion of legal completions on new, more profitable sites, will enable the Group to increase profits significantly in 2013 in line with its expectations, subject to stable market conditions. With a further increase in capital turn, this strong profit is expected to generate a return on capital for 2013 of at least 10%.

“The success of the Group in acquiring high quality, consented residential land, combined with the strong pipeline of future land opportunities, will support further sales outlet growth into 2014 and beyond.  This in turn is expected to lead to further strong improvements in return on capital employed going forward.

At the time of writing Bovis Homes’ share price is 794.5p. That’s up over 37% so far in 2013, and 60% on this time last year.

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> Jon doesn’t own shares in Bovis Homes.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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