Preliminary Results 2004

Bovis Homes Group PLC
14 March 2005


                             BOVIS HOMES GROUP PLC
                              PRELIMINARY RESULTS
                      FOR THE YEAR ENDED 31 DECEMBER 2004
                              Issued 14 March 2005

The Board of Bovis Homes Group PLC today announced its preliminary results for
2004.

   • Pre tax profit increased by 18.0% to £145.2 million 
     (2003: £123.0 million) showing a 21% compound annual increase since 
     flotation in 1997

   • Earnings per share increased by 17.3% to 87.0p (2003: 74.2p) showing a
     21% compound annual increase since flotation in 1997

   • Final dividend declared of 13.6p net per ordinary share making 20.0p for
     the year, a 22% increase over the prior year

   • Commitment to increase the full year dividend by 5.0p per share over each 
     of the next four years, thus doubling the full year dividend from its 
     current base of 20.0p

   • Operating margin at 26.7% (2003: 27.0%)

   • Return on average capital employed of 25.7% (2003: 25.5%)

   • Plots with planning consent increased to 11,528 plots (owned: 11,174
     plots/controlled: 354 plots)

   • Strategic landholdings increased to 22,831 potential plots after
     transferring 2,155 plots to consented landholdings during 2004

   • Year end net borrowings of £15.5 million (2.8% geared)


Commenting on the results, Malcolm Harris, the Chief Executive of Bovis Homes
Group PLC said:

'The Group has delivered a year of record profits with a 9% increase in the
volume of legal completions and resultant strong cash flow.

The Group is now benefiting from a strong pull through of strategic land into
consented land. This success is expected to continue into the future with a
reasonable degree of certainty for the next four years. The profit and cash
generation resulting from the Group's short, medium and long term investment in
strategic land provides the base to commit to a more progressive dividend policy
in addition to facilitating the Group's planned expansion including the launch
of two new regions on 1 July 2005.

The Group has commenced 2005 with improved landholdings, an exciting new product
range and a commitment to achieve the planned expansion. The stability of base
interest rates since August 2004 has assisted consumer confidence and visitor
numbers and reservations in early 2005 have been encouraging. The Group is well
positioned and, assuming an ongoing stable economic environment, the Board is
confident of the prospects for the Group in 2005.'

Enquiries: Malcolm Harris, Chief Executive                
           Bovis Homes Group PLC                   
           On Monday 14 March - tel: [phone]                             
           Thereafter - tel: [phone]

Results issued by: Andrew Best / Emily Bruning
                   Shared Value Limited
                   tel: [phone]


Chairman's statement

The Group has achieved record profits during the 2004 financial year, with the
seventh consecutive year of profit growth since the Group's flotation in 1997.
During this seven year period profits have grown by a compound 21% per annum.

The Group has been successful during 2004 in further strengthening its land bank
and has increased return on average capital employed to 25.7%.

Results

Profit on ordinary activities before tax for the year ended 31 December 2004
increased by 18.0% to £145.2 million, compared with £123.0 million in 2003. This
result was achieved from total turnover of £559.5 million, 17.0% greater than
the previous year.

The operating margin remained broadly similar at 26.7% compared with 27.0% in
2003 as did return on average capital employed at 25.7% compared to 25.5%
reported for the prior year. Basic earnings per share improved by 17.3% to 
87.0 pence per ordinary share compared to 74.2 pence per ordinary share in 2003.

Dividend

The Board proposes a final dividend for the year ended 31 December 2004 of  13.6
pence to be paid on 20 May 2005 to shareholders on the register at the close of
business on 29 March 2005. This dividend when added to the interim dividend of
6.4 pence paid on 26 November 2004 totals 20.0 pence for the year and is covered
4.4 times by the basic earnings per share of 87.0 pence. The total dividend per
share for the year represents an increase of 22% over the total dividend for
2003 of 16.4 pence.

The Board intends, conditional on any necessary approvals required at future
annual general meetings, to increase the full year dividend over the next four
years by 5.0 pence per annum. This commitment, which is subject to a stable
business environment, will double the full year dividend over the four year
period to 40.0 pence per share from its 2004 base of 20.0 pence per share. The
Group is able to make such a commitment in terms of dividend growth due to the
strong pull through of strategic land which will deliver strong future profits
and cash flows for the Group.

The Board is proposing to introduce, subject to the approval of the Company's
shareholders at the 2005 Annual General Meeting, a scrip dividend alternative,
pursuant to which the shareholders may elect to receive the whole or part of
their dividend in new ordinary shares credited as fully paid instead of cash,
for the final dividend for the year ended 31 December 2004 and a scrip dividend
mandate scheme for all future dividends to the extent that the Board decides, at
its discretion, to offer a scrip dividend alternative in respect of such
dividends. A circular containing details of the scrip dividend alternative and
the scrip dividend mandate scheme, together with the relevant form of election,
will be sent to shareholders at the same time as the notice of meeting for the
Annual General Meeting.

Market conditions

The housing market, after a period of sustained buoyancy, experienced a mixed
year in 2004. By contrast to 2003, the first half of the year was very strong.
House sales price growth reached unsustainable levels combined with a
significant increase in the volume of housing transactions. Consequently, press
speculation and powerful commentary from external bodies including the Bank of
England Monetary Policy Committee created a general concern that the housing
market could witness a downturn. The second half of 2004 for the housing market
saw the consumer reflecting this concern with slower house sales price growth
and a slowing of the increase in property transactions. Having shown a year to
date increase of 38% to June 2004, property transactions closed 2004 31% above
2003. The Monetary Policy Committee increased base interest rates four times
between 5 February 2004 and 5 August 2004, increasing the rate from 3.75% to
4.75%. Whilst the absolute level of base interest rates was not such as to
significantly undermine housing affordability, the upward direction of these
rates during the six month period between February and August weakened consumer
confidence. Consumers deferred making significant purchase decisions in
anticipation of potential further interest rate rises. The Monetary Policy
Committee was effective with its interest rate policy and market commentary.
Base interest rates have remained unchanged since August 2004 which assisted in
stabilising consumer confidence by the end of 2004. Also, average earnings
continue to rise ahead of inflation which should provide further confidence.

At the end of the third quarter of 2004, affordability trend indicators reported
that the ratio of first year mortgage interest payments as a percentage of
average net earnings for a two income couple was 24%. Whilst this rate was
higher than the 19% reported at the same point in 2003, it demonstrates strong
ongoing housing affordability when compared to the same indicator published in
1990 at 38%, the highest the indicator has recorded in the last twenty years,
coinciding with the end of the housing 'boom' of the late 1980's.

Strategy

The Group continues to employ a consistent strategy in pursuit of its core
objectives. This strategy involves focusing on delivering the maximum value
achievable from each home constructed and legally completed. A growing coverage
of England and Wales through the expanding regional structure contributed to
growth in the volume of legal completions. Together, volume and pricing
contributed to the increase in profits whilst generally retaining the Group's
operating margins at the industry leading levels previously achieved.

The Group aims to deliver a quality product to the housing market which is
driven by customer needs, employing modern construction techniques which involve
using materials pre-finished under factory conditions along with ongoing focus
on build quality on the sites. New products are designed to improve the houses
which the Group offers to its customers with reduced maintenance and better use
of internal space. The Group operates customer care teams which are a core part
of the regional management structure providing pre handover inspections and post
occupation customer care services.

In a housing market where further sales price increases may be more difficult to
achieve, the Group's strategy to grow the size of its business through increased
coverage of England and Wales is considered the best way forward. Subject to
market conditions, the Group intends to launch further regions, particularly in
locations where the Group has large strategic landholdings which, in the short
term, are anticipated to deliver a large number of land plots with residential
consent. These new regions will use the long land supply of these large
strategically sourced landholdings to provide an 'anchor' site to base the
region around.

To this end, the Group has decided to launch two new regions effective from 
1 July 2005. The first of these will be based at Bristol. Its 'anchor' site will
be Filton where the Group has control of approximately 2,200 plots of land
allocated in the local plan for residential development. The second of these new
regions will be based at Wellingborough where the Group has a significant
strategic landholding of approximately 3,000 plots of land, again allocated for
residential development.

The Board

Following the resignation of Stephen Brazier from the Board and the Company on
31 July 2004, the Board now comprises four non-executive directors, including me
as Chairman, and two executive directors.

The Combined Code

The Group continues to be committed to good corporate governance and complies
with the provisions of the 2003 Combined Code.

Employees

Bovis Homes is a people business and I would like to thank all our employees for
their contribution during the year. It is essential that the right individuals
are recruited, trained and motivated. The objective is to ensure that the Group
employs the highest calibre of employees, who add value to the business and are
sensitive to the demands and requirements of the Group's customers, whilst
having the entrepreneurial drive and flair to move the operation forward without
compromising sound corporate governance.

Pensions

The Group has demonstrated its commitment to the Bovis Homes defined benefits
pension scheme by agreeing to make special contributions totalling approximately
£11 million through the period from July 2004 to April 2007. These special
contributions will remedy the past service pension deficit of £10.23 million
identified at the latest triennial actuarial review completed effective from 
1 July 2004. Future service employer contributions have been increased from 20% 
to 22% of basic salary whilst employee contributions have been increased from 
5% to 6%.

Prospects

The Monetary Policy Committee raised base interest rates by 100 basis points
between February and August 2004. These rises have taken effect and quelled
unsustainable house price increases that were present in the marketplace. During
2005 it is considered likely that house price increases will be more subdued.
Affordability remains good and the fundamentals of the housing market remain
strong with demand in the areas in which the Group operates exceeding supply.
The Group continues to increase the number of lower priced high value small
homes offered following the launch of its new product range during 2004.

The Group is well on course to deliver its predicted 9,000 plots of consented
land through the strategic land bank between 2004 and 2006 with 2,155 plots
converted in 2004 and the conversion of Brockworth Airfield, near Gloucester,
for an estimated 1,300 plots in January 2005.

The Group started 2005 with a strong land bank and a product range designed to
appeal to the segment of the market where housing transactions are motivated by
need rather than speculative appetite. The launch of new regions will assist in
driving the Group to increased activity levels. The Group is well placed to
operate successfully in a more challenging market and, subject to the current
economic environment continuing, the Board anticipates that 2005 will be another
successful year.

Nigel Mobbs
Chairman



Chief Executive's operational review

Group results

The Group achieved a further year of record profits and improvement to the asset
base. Profit before tax increased to £145.2 million, an 18.0% increase over the
previous year. Return upon average capital employed improved to 
25.7% (2003: 25.5%). The consented land bank closed at 11,528 plots 
(2003: 10,878 plots) and strategic land ended the year with 22,831 potential 
plots (2003: 22,152 potential plots) after transferring 2,155 plots from 
strategic land to consented land during the year. The Group's operating margin 
remained broadly in line at 26.7% (2003: 27.0%). Gearing remained low due to 
good cash management including an increase in the value of deferred payment land 
creditors.

Trading environment

The first six months of the year witnessed a strong demand stimulated by a
combination of increased employment, average earnings improvements and low
interest rates. The second half year was adversely affected by increased
interest rates and negative comments relating to the housing market made by both
the media and the Bank of England. Although base interest rates were still low
by historical standards, the movement from 3.75% in February 2004 to 4.75% in
August 2004 was sufficient to cool both consumer spending and house price
increases.

Product mix and average sales price

The Group legally completed 2,700 homes, including 127 houses constructed on
third party owned land, compared to 2,482 homes in 2003, including 118 houses on
third party owned land.

Market sector analysis

Year ended 31 December                        2004                        2003
                           %   Units       Average     %   Units       Average
House type                             sales price                 sales price
                                                 £                           £
______________________________________________________________________________
One and two bedroom       15     418       136,800    13     337       128,900
Three bedroom             37     989       184,900    33     814       167,000
Four bedroom              17     468       245,300    23     571       227,100
Five or more bedroom      15     397       313,400    15     364       298,800
Retirement Living          5     125       243,400     4     104       190,700
Social housing             6     176        91,500     7     174        74,700
Partnership housing
(third                     5     127        67,200     5     118        66,100
party owned land units)
______________________________________________________________________________
Group                    100   2,700       197,900   100   2,482       184,700
______________________________________________________________________________

The Group's average sales price was £197,900 compared with £184,700 the previous
year, a 7.1% increase. The average size of unit increased by 0.5% to 1,146
square feet (2003: 1,140 square feet). The average sales price per square foot
increased by 6.6%. The average construction cost per square foot increased by
6.9%, after absorbing specification upgrades as well as additional taxation
arising from aggregate tax, landfill tax and climate change levy. Approximately
2% of the cost increase related to changes in building regulations which was
allowed for in respect of investment appraisals and internal budgets. The
average house price increase in the United Kingdom in 2004 reported by the Land
Registry was 11.8%, whilst the comparable increase reported by the Nationwide
was 12.7% and by the Halifax was 15.1%.

Product mix analysis

Year ended 31 December                        2004                        2003
                           %   Units       Average     %   Units       Average
House type                             sales price                 sales price
                                                 £                           £
______________________________________________________________________________
Traditional               31     858       185,900    40     983       177,800
Room in the roof          19     512       292,300    19     480       274,400
Three storey              25     663       206,000    19     476       193,600
Apartments                 9     239       140,700     6     147       130,500
Retirement Living          5     125       243,400     4     104       190,700
Social housing             6     176        91,500     7     174        74,700
Partnership housing
(third                     5     127        67,200     5     118        66,100
party owned land units)
______________________________________________________________________________
Group                    100   2,700       197,900   100   2,482       184,700
______________________________________________________________________________

Regional performance

Unit completions and average sales price
Year ended 31 December                                 2004                 2003
                                     Units       Average     Units       Average
                                             sales price             sales price
                                                       £                       £
________________________________________________________________________________
South East                             873       204,700       795       197,700
South West                             809       171,100       690       161,400
Central                                531       213,900       543       193,600
Eastern                                178       202,500       108       212,900
Northern                               184       202,300       242       173,700
Retirement Living                      125       243,400       104       190,700
________________________________________________________________________________
Group                                2,700       197,900     2,482       184,700
________________________________________________________________________________

The Northern region's legal completions total in the year was adversely affected
due to delays in the provision of utility services required to enable properties
to legally complete within the trading period. Eastern region, in its first year
as a separately reported operation, achieved good growth and is now established
to expand rapidly.

Operating margins

Year ended 31 December                                    2004            2003
                                                             %               %
______________________________________________________________________________
South East                                                28.8            26.5
South West                                                22.9            21.9
Central                                                   27.7            29.9
Eastern                                                   31.1            41.0
Northern                                                  18.2            25.7
Retirement Living                                         35.0            29.7
______________________________________________________________________________
Group                                                     26.7            27.0
______________________________________________________________________________

South West region's operating margin included the margin arising on 127
dwellings which were constructed on third party owned land. The profit margins
from this segment of its business are significantly lower than those from
private sector sales. Such activities, however, provide early positive cash flow
and a high return on average capital employed.

The Northern region's reduction in operating margin was a result of a build up
in overhead to facilitate future expansion and a substantial reduction in volume
as a result of utility service problems in respect of two large developments.
The reduction in volume in 2004 is expected to be redressed by an increase in
revenue in 2005.

Land and planning

Consented land bank

Total plots as at 31 December                                  2004       2003
                                                              Plots      Plots
______________________________________________________________________________
South East                                                    3,531      3,279
South West                                                    2,464      2,398
Central                                                       2,210      2,114
Eastern                                                       1,135        929
Northern                                                      1,526      1,392
Retirement Living                                               308        356
______________________________________________________________________________
Group (exc. third party owned land plots)                    11,174     10,468

Third party owned land plots
South West                                                      354        410
______________________________________________________________________________
Group                                                        11,528     10,878
______________________________________________________________________________

Years' supply based upon legal completions in the year          4.3        4.4
______________________________________________________________________________

The average plot cost of the consented land bank (excluding social housing and
third party owned land) was £47,000 which represented 22.1% of the average sales
price achieved in 2004 (excluding social housing and units constructed on third
party owned land).

The strategic landholdings increased to 22,831 potential plots after
transferring 2,155 plots from strategic land to consented land during the year
at an average discount to market value of 23%.

A significant proportion of the Group's strategic landholdings are now at an
advanced planning stage and are anticipated to add considerable value in the
future. As previously advised, the Group anticipates between 2004 and 2006 that
it will gain planning consent on approximately 9,000 plots of strategic land,
which will assist the Group's planned expansion. The Brockworth Airfield site,
near Gloucester, obtained planning consent in mid January 2005 for approximately
1,300 plots at a significant discount to market value. Two other large projects,
namely Wellingborough and Filton, combined are anticipated to provide over 5,000
dwellings.

Legal completions originating from strategic land contributed 29% (2003: 28%) of
the Group's development profit in the year and 40% were built on previously used
land (2003: 35%). This percentage is a reflection of the high historical
concentration of Group developments in areas where there is less reusable land
available. A high percentage of new investments are classified as brown land,
which will substantially increase the percentage of dwellings constructed on
previously used land.

Strategic land bank

Total potential plots as at 31 December                      2004       2003
                                                            Plots      Plots
____________________________________________________________________________
South East                                                  9,095     11,078
South West                                                  5,938      6,616
Central                                                     6,349      3,260
Eastern                                                       434        336
Northern                                                      872        822
Retirement Living                                             143         40
____________________________________________________________________________
Group                                                      22,831     22,152
____________________________________________________________________________

Years' supply based upon completions in the year              8.5        8.9
____________________________________________________________________________

Included in strategic landholdings were 10,928 potential plots in strategic
'growth locations'. Growth locations are areas designated for development within
draft or adopted development plans by local, county or unitary planning
authorities.

Total potential plots as at 31 December                     2004         2003
                                                           Plots        Plots
_____________________________________________________________________________
South East                                                 3,737        4,462
South West                                                 3,506        4,242
Central                                                    3,146        1,323
Eastern                                                       98            -
Northern                                                     298          248
Retirement Living                                            143           40
_____________________________________________________________________________
Group                                                     10,928       10,315
_____________________________________________________________________________


Partnership Developments

Bovis Homes Partnership Developments is actively involved with housing
associations, local authorities and other similar bodies providing quality new
homes at affordable prices, for either rent or shared ownership, to communities
throughout the country. The Group has total in-house capability to handle all
aspects of each project including major regeneration schemes. In addition to
design and build, there exists expertise to provide cross subsidies from the
development and sale of open market housing and commercial buildings.

The largest single partnership urban regeneration project that the Group is
currently involved in is at Horfield in Bristol where it is redeveloping in
excess of 800 homes. The Group was notified during 2004 that it has been
appointed as preferred partner in respect of a further regeneration scheme which
is expected to commence development in 2005, containing over 900 dwellings.

Research and development

The Group believes that continuous improvement through research and development
is key to the continuing success of the business and is a significant factor in
delivering environmental, social and sustainability objectives. The Group
engages with many stakeholder organisations, including housebuilding industry
warranty providers and building control bodies, the House Builders Federation,
the Building Research Establishment, the ODPM in respect of building regulation
development, and actively partners many manufacturers and suppliers. Further
details are contained in the Group's Corporate Social Responsibility report
which is being sent to all shareholders in addition to the Annual Report and
Accounts.

Health, safety and environment

Best practice in health, safety and environmental awareness and management is an
important element in the continuing success of the Group. The objective is to
maintain the highest practical levels of health and safety and effective
environmental policies.

The Health, Safety and Environmental Consultative Committee oversees these
important matters, formulating and promulgating policy to all stakeholders. The
Committee is chaired by a Bovis Homes Limited director by annual rotation to
ensure that fresh ideas and initiatives are constantly introduced, assessed and,
where appropriate, implemented on a consistent basis. The chairman is supported
by a committee comprising Group employees from numerous disciplines complemented
by the Health and Safety Director and external independent professional
advisers. The chairman reports formally to the Board through submission of a
Health and Safety report tabled at each Board meeting.

Bovis Homes promotes all aspects of safety and environmental management
throughout its operations in the interests of all stakeholders. Its record of
success was once again recognised in 2004 with the Gold Medal Award from the
Royal Society for the Prevention of Accidents and the National Award from the
British Safety Council. Further details are available in the Group's
free-standing Corporate Social Responsibility report.

Bovis Homes' objective is to achieve sustainable construction and reduce
environmental impact. The Group seeks to protect and, wherever possible, improve
the environment by retaining mature landscaping and introducing new planting and
habitats.

It is also committed to planning for the most efficient and effective use of
development land. The Group has introduced higher density properties with
flexible accommodation which addresses the changing lifestyles of its customers,
including the ability to work from home.

The Group has issued to employees within the Group an Environmental Management
Manual containing the Environmental Policy, Environmental Effects Document and
Best Practice Checklists. It is a comprehensive approach consolidating policies,
procedures and systems, explaining how all employees can assist and make a
positive contribution to the environment.

Legislation and taxation

The planning system showed no signs of improvement during 2004. There is an
enormous gulf between the positive intentions of the Government and delivery by
many of the planning authorities themselves. The Planning and Compulsory
Purchase Bill and the new Communities Bill received Royal Assent during the
year.

The housebuiding industry continues to be adversely affected by increased taxes
levied by the Government.

Aggregate tax

The levy on aggregate materials at £1.60 per tonne continues to add considerable
cost to all infrastructure, roads and sewers as well as general construction
costs.

Landfill tax

The active waste tax was increased to £15 per tonne during 2004 with further
substantial rises expected in 2005 onwards. Inert waste tax remained at £2 per
tonne during 2004.

Climate change levy

Additional taxes have been imposed on electricity, gas, liquefied petroleum gas
and solid fuels.

Stamp duty land tax

All significant land purchases attract stamp duty land tax at 4.0% and the
majority have a non recoverable VAT element of 17.5% added. This is in addition
to the stamp duty land tax that purchasers pay upon legal completion of the
home.

Pension scheme

The Group made a commitment during 2004 to fund the deficit on the defined
benefits pension scheme by 2007. A payment of £1.85 million was made in 2004 and
will be followed by additional payments to fund the deficit by 2007. In
addition, the employer contribution rate was increased to 22% of salary with
effect from 1 July 2004. The employee contribution was increased from 5% to 6%
with effect from 1 July 2004.

Group structure

The new Eastern region reported for the first time as a separate operation in
2004. The region's first independent year of trading was highly successful. The
operating margin remained high due to the effect of the Cambourne development,
which was transferred from the Central region on the date of the launch of the
Eastern region. The Northern region suffered a temporary set back due to
problems with utility services which is expected to be redressed by an increase
in revenue in 2005.

Two new regions will be established on 1 July 2005. The new Wessex operation
will be established in Bristol. It will operate for the first eighteen months as
a sub region of the South West region and report as a separate business with
effect from 1 January 2007. The second new region will be based at
Wellingborough and will be established to manage this important large project,
and surrounding developments. It will operate as a sub region of the Central
region until 1 January 2007 when it will be reported as a separate region.

Outlook for 2005

The economy is expected to be stable during the forthcoming year. High levels of
employment and increases in earnings above retail price inflation provide a good
economic base from which to operate.

Average house sales prices, within the market the Group operates in, are not
anticipated to increase faster than average earnings, which will improve the
affordability ratio.

The Group has designed a new range of products aimed at first time buyers which
provides a good platform to expand the Group's activity and provide homes for
people on lower incomes.

Malcolm Harris
Chief Executive


Financial review

Overview

For the housing market, 2004 was very much a year of two halves. A strong demand
for homes at rapidly increasing sales prices in the first half of the year
engendered an air of unsustainability. Mortgage interest rates began to increase
and housing affordability, whilst remaining strong, did deteriorate. In the
second half of the year, the once confident consumer showed signs of uncertainty
and purchase decisions were deferred until the direction of interest rates and
house prices became clearer.

Against this backdrop the Group delivered an increase in earnings per share of
17.3% to 87.0 pence per share and an increase in profit before tax of 18.0% to
£145.2 million. The Group continued to invest in new land opportunities and
closed the year with a land bank supply of 4.3 years with 11,528 controlled
plots with full planning consent. The land bank increased by 6% during the year.
The Group has maintained its investment in other areas of working capital such
that at the end of 2004 there were sufficient units under construction, at
different stages of build, to largely satisfy the legal completion volume
requirements for 2005. Notwithstanding this ongoing investment, the Group has
continued to generate significant positive trading cash flow which led to a
decrease in the Group's year end net borrowings which stood at £15.5 million.

The Group has adopted unchanged accounting policies for this financial year.
There have been no new UK Financial Reporting Standards which affect the Group
issued by the Accounting Standards Board during 2004.

Profit before tax

The profit on ordinary activities before tax for the year ended 31 December 2004
amounted to £145.2 million. This compared with £123.0 million in the previous
year and represented an increase of 18.0% year on year. There were no
exceptional items during either 2004 or 2003.

Turnover

Total turnover achieved was £559.5 million (2003: £478.4 million). Included
within this figure was housing turnover of £534.4 million 
(2003: £458.4 million). The increase in housing turnover was primarily due to 
an 8.8% increase in unit legal completions to 2,700 units compared with 2,482 
legal completions in 2003 and an increase in average sales price of 7.1% to 
£197,900 compared with £184,700 in 2003. The average sales price per square foot 
increased by 6.6% whilst the average size of unit increased marginally by 0.5% 
to an average 1,146 square feet (2003: 1,140 square feet).

Land sales amounted to £19.6 million compared with £13.8 million in 2003 whilst
other income, mainly arising from sales of commercial interests, was 
£5.5 million compared with £6.2 million in 2003.

Operating profit

The Group achieved an operating profit of £149.3 million, an increase of 15.6%
over £129.2 million in the previous year, and maintained a relatively stable
operating margin at 26.7%, as compared to 27.0% in 2003.

Land sale profits less option costs generated a net profit of £9.4 million in
2004 (2003: £2.9 million). Land sale profits included the sale of commercial
land, without residential planning consent, for £9.6 million with profit of 
£5.5 million. In total, the Group disposed of 127 plots of residential land 
typically on large sites where there is a long land bank supply.

Administrative expenses, which include all sales and marketing costs, as a
percentage of turnover were 8.1% compared with 8.5% in 2003. Administrative
expenses increased by 11.8% to £45.5 million compared with £40.7 million in the
previous year. The increase included additional headcount from the expansion of
the regional structure. Average staff numbers (excluding site based staff) in
2004 were 516 compared with 478 in 2003.

As a result of the 2004 defined benefits pension scheme actuarial valuation,
administrative expenses included a SSAP 24 pension charge of £0.75 million in
addition to the normal pension contributions made by the Group. This represents
the first six months of recognition of the past service deficit identified
through the actuarial valuation.

Financing

Net interest payable amounted to £4.1 million (2003: £6.2 million), and was
covered 36 times by profit before interest.

Taxation

The corporation tax charge for the year amounted to £43.2 million, and was after
crediting an adjustment in respect of prior years amounting to £0.4 million.

Dividends

Dividends paid and proposed totalled £23.5 million (2003: £19.2 million)
resulting in a retained profit for the financial year of £78.5 million. The
total annual dividend was covered 4.3 times by post tax earnings.

Shareholders' funds

Shareholders' funds increased during the year to £545.3 million as a result of
retained earnings of £78.5 million and the issue of £1.8 million of share
capital and share premium arising from the exercise of share options by
employees, offset by the increase in own shares of £0.5 million held which are
netted against equity.

Net borrowings

The Group ended the year with net borrowings of £15.5 million having started
2004 with net borrowings of £45.3 million. The Group utilised its existing
bilateral committed revolving loan facilities to varying degrees throughout 2004
such that the average net borrowing was £52.0 million. The Group had fixed rate
borrowings at 31 December 2004 of £75.0 million. Cash deposited in interest
bearing bank accounts amounted to £59.5 million.

Working capital

Land increased from £468.7 million to £507.6 million, with an increase in land
creditors from £46.9 million to £87.0 million. Work in progress increased from
£177.2 million (including £21.1 million of part exchange properties) to 
£205.9 million (including £37.8 million of part exchange properties).

As at 31 December              2004             2003                Increase/
                                                                   (decrease)
                                 £m               £m                      £m
____________________________________________________________________________
Land held for development     507.6            468.7                    38.9
Land creditors                (87.0)           (46.9)                  (40.1)
____________________________________________________________________________
Net investment in land        420.6            421.8                    (1.2)
____________________________________________________________________________
Raw materials and work in
progress                      164.5            152.4                    12.1
Part exchange properties       37.8             21.1                    16.7
Development properties          3.6              3.7                    (0.1)
____________________________________________________________________________
Work in progress              205.9            177.2                    28.7
____________________________________________________________________________

At the end of 2004, the Group held 4.3 years' supply of controlled land, based
on the previous year's legal completions, with 11,174 plots of owned land with
planning consent and 354 plots of third party owned land which the Group
controls through the establishment of JCT contracts with these third parties to
construct affordable housing.

Return on average capital employed

Return on average capital employed for 2004 amounted to 25.7% based on the
operating profit of the Group of £149.3 million and average capital employed of
£580.5 million. For the seventh consecutive year, the Group has exceeded its
objective of achieving a minimum return on capital employed of 20%.

Pension scheme actuarial valuation

The latest triennial actuarial valuation of the Group's defined benefit pension
scheme was completed as at 30 June 2004. This valuation indicated that the total
market value of the scheme's assets was sufficient to cover 77% of the present
value of the scheme liabilities in respect of member service up to the valuation
date, including allowance for future salary increases to normal retirement age.
The past service deficit based on this funding level amounted to £10.23 million.
The Group has decided to remedy this deficit during the period of July 2004 to
April 2007, with a number of agreed special contributions to the pension scheme,
totalling approximately £11.0 million when interest is taken into account. The
first of these special contributions was made during 2004 and amounted to 
£1.85 million. A further payment of £1.5 million was made in January 2005. The
scheme's independent actuary has advised that the average remaining service life
of a scheme member is 7 years. Under the provisions of UK accounting standard
SSAP 24 the deficit will be charged to the Group's profit and loss account over
these 7 years with any year end surplus of special contributions over charges
being held as a prepayment in the balance sheet. For the period from 1 July 2004
to the 31 December 2004, a SSAP 24 charge was included of £0.75 million and the
year end balance sheet prepayment stood at £1.1 million.

On the basis of advice from the scheme's independent actuary in respect of
future service, the Group increased the employer contribution rate from 20% to
22% of pensionable earnings (less one and a half times the lower earnings limit
where appropriate) with effect from 1 July 2004. Employee contribution rates
were increased from 5% to 6% from 1 July 2004.

Cash flow

Cash inflow from operating activities amounted to £100.6 million 
(2003: £7.8 million). This cash inflow reflected both continuing strong cash 
generation from the sale of houses and other commercial interests and investment 
in growing the working capital base. After accounting for capital expenditure, 
finance costs, dividend payments and tax payments, the net borrowings of the 
Group decreased by £29.8 million from £45.3 million at 1 January 2004 to 
£15.5 million at 31 December 2004.

Bank facilities and liquidity risk

The Group held total bank facilities of £216.0 million at 31 December 2004,
including £5.0 million of overdraft facility. The balance of the facilities were
made up of bilateral committed revolving loan facilities held with seven banks,
mainly five year facilities but with some seven year facilities. The earliest
maturity date for these facilities is 10 December 2005 in respect of 
£35.0 million of facilities, with £124.0 million maturing on 9 January 2007, 
£20.0 million on 5 February 2007, £12.0 million on 3 May 2007 and £20.0 million 
on 10 December 2007.

The Group's net borrowing position at 31 December 2004 of £15.5 million
continued to reflect modest gearing of 2.8%. With average net borrowings of
£52.0 million and average monthly shareholders' funds of £498.8 million, the
average gearing of the Group during 2004 was 10.4%. Given timing differences
between the investments in working capital and the flow of legal completion
monies from house sales, the Group's peak net borrowings during 2004 were 
£86.0 million.

Refinance of revolving loan facilities

In February 2005, the Group successfully refinanced its group of bilateral
facilities. New bilateral facilities were established with an aggregate value of
£220.0 million on five year terms which mature on 6 February 2010. Whilst some
way off from the natural maturity date of a number of the Group's existing
facilities, it was identified that there was a window of opportunity to lock in
finance for the next five years at favourable pricing margins compared to
historical rates.

The Group believes that total bank facilities of £225.0 million, including the
£5.0 million overdraft facility, are sufficient to enable funding of foreseeable
cash flows required for the medium term plans for the Group. As these are
bilateral revolving committed loan facilities there is considerable flexibility
available to the Group to manage its borrowing needs.

Interest rate risk

By fixing £75.0 million of borrowings through interest rate swaps with varying
maturities, the Group has made certain its interest costs on what is considered
its core borrowing requirement. Borrowings in addition to this core borrowing
are judged on a case by case basis at the time of drawing down the loans in
terms of interest rate flexibility and loan maturity. The Group has the ability
to borrow using its bilateral committed revolving loan facilities for as little
as a few days or up to the period through to maturity of the relevant facility.
The Group can decide with its banks whether to fix the interest rate of
borrowing through the further use of interest rate swaps, although care is taken
to marry together the dates of draw down and maturity of the floating rate
borrowing and interest rate swap.

Fair value

The fair value of the Group's fixed rate borrowings at 31 December 2004 exceeded
its book value by £1.3 million. This reflected the movement in long term
interest rates since these financial instruments were established. Further, the
fair value of land creditors due after more than one year (deemed financial
instruments under FRS 13: 'Derivatives and Other Financial Instrument
Disclosures') amounted to £20.4 million compared with their book value of 
£23.3 million, derived from the discounting of future cash flows in settling 
land creditors. The fair values of the Group's other long term assets and 
liabilities were not materially different from their book values.

Accounting standards

During 2004 there have been no new UK Financial Reporting Standards issued by
the Accounting Standards Board which impact the Group. Transitional rule
disclosures as required through the stage implementation of FRS 17: 'Retirement
Benefits' have been included in accordance with the standard.

In respect of FRS 17 an independent actuary has valued the Group's defined
benefits pension scheme assets and liabilities, as at 31 December 2004, on the
basis defined in the standard. The valuation shows a deficit, net of deferred
tax, on the scheme of £12.6 million (2003: £12.3 million deficit), which is a
disclosure item only in the 2004 Annual Report and Accounts in accordance with
the standard.

Under FRS 18: 'Accounting Policies' the Group has reviewed its accounting
policies to ensure that they remain the most appropriate to its particular
circumstances for the purpose of giving a true and fair view.

These financial statements have been prepared in accordance with applicable UK
accounting standards. As a UK listed company, the Group will be required for its
consolidated accounts to adopt International Financial Reporting Standards
('IFRS') for the year ending 31 December 2005, including the interim results for
the half year ending 30 June 2005. The Group has assessed during 2004 each of
the changes in accounting required through the adoption of IFRS. The intention
is to publish, prior to the announcement of the Group's interim results for
2005, restated financial information for both the financial years ended 
31 December 2003 and 31 December 2004. This will provide interested parties with
two years of trend data using IFRS and will facilitate a better understanding of
the results which will be published for the year ending 31 December 2005. IFRS
is unlikely to have a significant impact on the trading results of the Group in
any one year and whilst the shareholders' funds under IFRS will reduce due to
the recognition of the Group's pension deficit and accounting for imputed
interest on deferred term land purchases, this reduction will be small relative
to shareholders' funds in total.

David Ritchie
Finance Director


Bovis Homes Group PLC
Group profit and loss account
                                                         Continuing operations

For the year ended 31 December 2004                     2004           2003
                                                        £000           £000
___________________________________________________________________________
Turnover                                             559,464        478,424
Cost of sales                                       (364,664)      (308,442)
___________________________________________________________________________
Gross profit                                         194,800        169,982
Administrative expenses                              (45,451)       (40,749)
___________________________________________________________________________
Operating profit                                     149,349        129,233
Interest receivable and similar income                 1,228            145
Interest payable and similar charges                  (5,395)        (6,365)
___________________________________________________________________________
Profit on ordinary activities before tax             145,182        123,013
Tax on profit on ordinary activities                 (43,200)       (36,500)
___________________________________________________________________________
Profit on ordinary activities after tax              101,982         86,513
Dividends paid and proposed                          (23,504)       (19,187)
___________________________________________________________________________
Retained profit for the financial year                78,478         67,326
___________________________________________________________________________
Basic earnings per ordinary share                       87.0p          74.2p
___________________________________________________________________________
Diluted earnings per ordinary share                     86.3p          73.8p
___________________________________________________________________________

In both the current and preceding financial years there were no other recognised
gains or losses.

In both the current and preceding financial years there was no material
difference between the historical cost profits and losses and those reported in
the profit and loss account.


Bovis Homes Group PLC
Group balance sheet
At 31 December 2004                                    2004           2003
                                                       £000           £000
__________________________________________________________________________
Fixed assets
Tangible assets                                      12,910          8,238
Investments                                              23             23
__________________________________________________________________________
                                                     12,933          8,261
__________________________________________________________________________

Current assets
Stocks and work in progress                         713,499        645,922
Debtors due within one year                          37,832         14,848
Debtors due after more than one year                  5,414          5,577
Cash and short term deposits                         59,486         30,005
__________________________________________________________________________
                                                    816,231        696,352
__________________________________________________________________________

Creditors: amounts falling due within one year     (218,448)      (141,915)
__________________________________________________________________________
Net current assets                                  597,783        554,437
__________________________________________________________________________
Total assets less current liabilities               610,716        562,698
Creditors: amounts falling due after more than one
year                                                (63,800)       (95,703)
Provisions for liabilities and charges               (1,586)        (1,516)
__________________________________________________________________________
Net assets                                          545,330        465,479
__________________________________________________________________________

Capital and reserves
Called up share capital                              59,146         58,870
Share premium account                               142,577        141,033
Revaluation reserve                                     203            203
Profit and loss account                             343,404        265,373
__________________________________________________________________________
Equity shareholders' funds                          545,330        465,479
__________________________________________________________________________


Bovis Homes Group PLC
Group cash flow statement
For the year ended 31 December 2004                   2004           2003
                                                      £000           £000
_________________________________________________________________________
Net cash inflow from operating activities          100,640          7,808

Returns on investments and servicing of finance
Interest received                                    1,155            155
Interest paid                                       (5,289)        (6,146)
_________________________________________________________________________
                                                    (4,134)        (5,991)
_________________________________________________________________________

Taxation paid                                      (40,750)       (35,000)
_________________________________________________________________________
Capital expenditure and financial investment
Purchase of tangible fixed assets                   (6,232)        (1,752)
Sale of tangible fixed assets                           68            424
Purchase of own shares                              (1,351)          (828)
Sale of own shares held                                216              -
_________________________________________________________________________
                                                    (7,299)        (2,156)
_________________________________________________________________________

Equity dividends paid                              (20,517)       (17,118)
_________________________________________________________________________
Cash inflow/(outflow) before management of liquid
resources and financing                             27,940        (52,457)
Management of liquid resources and financing
(Increase)/decrease in short term deposits         (26,094)        51,544
Issue of ordinary share capital                      1,820          2,570
_________________________________________________________________________
                                                   (24,274)        54,114
_________________________________________________________________________
Increase in cash                                     3,666          1,657
_________________________________________________________________________

Bovis Homes Group PLC
Group reconciliation of movements in shareholders' funds

For the year ended 31 December 2004                   2004           2003
                                                      £000           £000
_________________________________________________________________________
Opening shareholders' funds                        465,479        395,874
Purchase of own shares                              (1,351)          (828)
Sale of own shares held                                259              -
UITF 17 expense of own shares held                     645            537
Issue of ordinary shares                             1,820          2,570
Total recognised gains and losses for the year     101,982         86,513
Dividends paid and proposed                        (23,504)       (19,187)
_________________________________________________________________________
Closing shareholders' funds                        545,330        465,479
_________________________________________________________________________

Group reconciliation of operating profit to operating cash flows

For the year ended 31 December 2004                   2004           2003
                                                      £000           £000
_________________________________________________________________________
Operating profit                                   149,349        129,233
Depreciation and amortisation                        2,110          1,881
Loss/(profit) on disposal of non property tangible
fixed assets                                            27            (38)
Increase in stocks                                 (67,577)      (101,426)
Increase in debtors                                (23,052)        (2,219)
Increase/(decrease) in creditors                    39,783        (19,623)
_________________________________________________________________________
Net cash inflow from operating activities          100,640          7,808
_________________________________________________________________________

Group reconciliation and analysis of net debt

For the year ended 31 December 2004                   2004           2003
                                                      £000           £000
_________________________________________________________________________
Increase in cash in the year                         3,666          1,657
Cash outflow/(inflow) from change in debt           26,094        (51,544)
_________________________________________________________________________
Change in net debt                                  29,760        (49,887)
Opening net (debt)/funds                           (45,274)         4,613
_________________________________________________________________________
Closing net debt                                   (15,514)       (45,274)
_________________________________________________________________________
Analysis of net debt:
Cash                                                 3,392              5
Short term deposits                                 56,094         30,000
Bank overdraft                                           -           (279)
Borrowings                                         (75,000)       (75,000)
_________________________________________________________________________
                                                   (15,514)       (45,274)
_________________________________________________________________________

Notes

1 Basis of preparation

  The Group accounts include the accounts of the Company and its subsidiary
  undertakings all of which are made up to 31 December 2004.

  The financial information included within this statement does not constitute 
  the Company's statutory accounts for the year ended 31 December 2003 or 2004. 
  The information contained in this statement has been extracted from the 
  statutory accounts of Bovis Homes Group PLC for the year ended 31 December 
  2004, which have not yet been filed with the Registrar of Companies, on which 
  the auditors have given an unqualified audit report, not containing statements 
  under section 237(2) or (3) of the Companies Act 1985.

  The Group has continued to implement the transitional rules of FRS 17:
  'Retirement Benefits' during the year. Required disclosures arising from this
  implementation are included in the Company's statutory accounts for the year
  ended 31 December 2004.

2 Earnings per ordinary share

  Basic earnings per ordinary share for the year ended 31 December 2004 is
  calculated on profit after tax of £101,982,000 (2003: £86,513,000) over the
  weighted average of 117,196,571 (2003: 116,523,457) ordinary shares in issue
  during the year.

  Diluted earnings per ordinary share is calculated on profit after tax of
  £101,982,000 (2003: £86,513,000) over the diluted weighted average of
  118,125,595 (2003: 117,267,429) ordinary shares potentially in issue during 
  the year. The diluted average number of shares is calculated in accordance 
  with FRS 14: 'Earnings Per Share'. The dilutive effect relates to the average 
  number of potential ordinary shares held under option during the year. This 
  dilutive effect amounts to the number of ordinary shares which would be 
  purchased using the aggregate difference in value between the market value of 
  shares and the share option exercise price. The market value of shares has 
  been calculated using the average ordinary share price during the year. Only 
  share options which have met their cumulative performance criteria have been 
  included in the dilution calculation. There is no dilutive effect on the 
  profit after tax used in the diluted earnings per share calculation.

  The weighted average number of shares excludes shares held in employee share
  trusts where dividends have been waived.

Notes (continued)

3 Taxation
                                                        2004           2003
                                                        £000           £000
  _________________________________________________________________________
  Current tax for the year                            43,264         37,027
  Adjustment in respect of prior years                  (368)          (460)
  _________________________________________________________________________
  Total current tax                                   42,896         36,567
  Deferred tax charge/(credit) for changes to timing
  differences                                            304            (67)
  _________________________________________________________________________
                                                      43,200         36,500
  _________________________________________________________________________

  During the year prior year tax positions were finalised leading to the release
  of a tax provision amounting to £368,000 (2003: £460,000). A deferred tax 
  charge of £304,000 (2003: credit of £67,000) arose as a result of the movement 
  of timing differences during the year, including a deferred tax charge of 
  £330,000 in respect of the pension fund SSAP 24 prepayment of £1,100,000.

4 Dividends

  The proposed final dividend of 13.6 pence net per ordinary share will be paid 
  on 20 May 2005 to holders of ordinary shares on the register at the close of
  business on 29 March 2005. The dividend, when added to the already paid 
  interim dividend of 6.4 pence, totals 20.0 pence for the year.

5 Annual Report and Accounts

  The 2004 Annual Report and Accounts will be posted to shareholders on or about 
  8 April 2005.



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