Interim Management Statement

RNS Number : 6464R

Bovis Homes Group PLC

08 November 2011

 



8 November 2011

Bovis Homes Group PLC

Interim Management Statement

A growing business with improving returns

Bovis Homes Group PLC is today issuing an Interim Management Statement for the period from 1 July 2011.  In addition, the Group is hosting a presentation for investors and analysts at 16.00 today at the offices of RBS.  Presentation slides will be available immediately following this event on the Group's web site www.bovishomesgroup.co.uk.

Current trading

The positive trading announced at the time of the Group's interim results has been maintained, in line with management's expectations.

Net private reservations achieved in the 44 weeks to 4 November 2011 were 1,480 (2010: 1,216), a 22% increase.  This improvement has been driven by two factors:

·     a 10% increase in the average number of active sales outlets in the period to 72 from 66 in the same period in 2010; and,

·     an improvement in the net reservations per site per week of 11% to 0.47 from 0.42 in the comparative period in 2010.  

In the ten week period since the interim results announcement, the Group has achieved 393 net private reservations (2010: 304), an improvement of 29%, representing a sales rate per site per week of 0.49 (2010: 0.45).  Visitors in the same period increased by 40%.

The Group has launched 29 new sales outlets in the year to date with a further four scheduled to launch in the remainder of 2011.  This will deliver an average of 73 active sales outlets for the year and circa 80 active sales outlets at 31 December 2011.

Land management

The Group has continued investing in good quality land on which hurdle rate gross margin and ROCE can be delivered based on current sales prices, build costs and sales rates.  The Group has acquired circa 900 consented plots on eight sites in the second half of 2011, bringing the total added in the year to date to circa 2,500 consented plots across 17 sites, mainly located in the south of England.  The pipeline of consented and strategic land remains strong, giving the Group confidence that it can continue to deliver sales outlet growth. 

The Group remains on target to achieve five land sales in 2011, which will generate proceeds of circa £50 million, the major part of which will be received in 2011 with the balance delivered as the land is serviced.

Balance sheet

On 4 November 2011, the Group had net debt of £31 million.  Given the phasing of housing revenues relative to land and construction cost cash flows, as well as the benefit of land sale proceeds, the Group expects to return to a modest net cash position at the year end.

Outlook

As at 4 November 2011, cumulative sales achieved to date expected to legally complete during 2011 were in excess of 2,000 homes.  In line with previous guidance, the Group is on track to deliver legal completion volume for 2011 between 5% and 10% ahead of the prior year's 1,901 homes. 

Sales prices achieved to date reflect the general stability of the housing market with small differentials experienced in different locations, prices being generally stronger in the south of England.  The Group expects its average sales price on private legal completions in 2011 to be circa £180,000 (2010: £172,300).  

Given the Group's ongoing strong cost control, the housing operating margin (excluding land sales) for 2011 is expected to approach 10%, significantly ahead of 2010's operating margin of 7%, with ROCE approaching 5%.

Further to the strong growth in active sales outlets in 2011, as at 4 November 2011 80 of the targeted 85 average active sales outlets for 2012 are already owned or controlled by the Group.

Subject to current market conditions continuing, the Group is confident that it can deliver an increase in ROCE in 2012 to at least 7% and make further strong improvements in 2013 and beyond.

Enquiries:                David Ritchie, Chief Executive

                                Jonathan Hill, Finance Director

                                Bovis Homes Group PLC

        Tel: [phone]

        Andrew Jaques/Reg Hoare/James White

        MHP Communications

        Tel: [phone]

Conference Call for analysts

David Ritchie, Chief Executive, and Jonathan Hill, Finance Director, of Bovis Homes will host a conference call at 08.00 today, Tuesday 8 November 2011, to discuss the Interim Management Statement.

To access the call please dial [phone] and quote passcode: 868503#.  Please dial in 5 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 8 December 2011 on 020 3140 0698, accessible with the passcode 380717#.

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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.

 

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