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LONDON (May 16): Bovis Homes Group Plc expects strong profit growth this year helped by higher average sales prices and improved profit margins, and sees conditions in the British housebuilding market remaining stable.
The company reported 783 private net reservations in the 19 weeks to May 11, a 33% increase over last year, with sales prices achieved on reservations to date modestly above management's expectations.
"The mix of homes has improved and the group expects the average sales price in the half-year results to be ahead of the comparative period of 2011," Bovis said in a statement.
Profits are expected to grow significantly, benefiting from a greater number of active sales outlets and stronger sales rates, a higher average sales price as homes in the south become a bigger part of the mix, and better margins from an increased contribution from sites acquired since the housing market downturn, Bovis said.
Across the industry, a focus on margins is helping UK housebuilders recover their footing after several difficult years, supported by lower land prices, cost-cutting and a shift in product mix from apartments towards houses, which is lifting selling prices.
Last week rival Barratt said it had enjoyed the best spring selling season in five years, helped by its focus on more buoyant sections of Britain's weak property market and government initiatives to prop it up.
Mix improvements are anticipated to continue through the rest of 2012, which would lead to further increases in average sales price in the second half compared to the first half, the housebuilder said.
In February, Bovis predicted a strong 2012 from its focus on the relatively buoyant market for family homes in the affluent south of England. — Reuters
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