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Bovis Homes rejects EU referendum concerns amid strong sales

Published 10/05/2016

Bovis Homes said demand from buyers remains strong due to access to mortgage finance
Bovis Homes said demand from buyers remains strong due to access to mortgage finance

Bovis Homes has brushed off concerns that the EU referendum is causing uncertainty in the housing market, signalling higher profit margins in the future.

In a trading update covering the year to date, the house-builder said demand from buyers remains strong due to access to mortgage finance.

The firm said its sales rate has improved and it has launched 17 new sites, with many selling out earlier than expected.

Bovis said the forthcoming EU referendum "has had no discernible impact on our business, with strong demand across all our operating areas", adding that improvements across the business are "providing opportunities for higher profit margins in the future".

Chief executive David Ritchie said: "We have been trading well with positive market conditions supporting activity levels and we are on track to deliver our planned growth for 2016.

"We continue to drive improvements in our operations across the enlarged business with strong investment in our people and focus on delivering value across the group."

In February Bovis reported a 20% rise in annual pre-tax profit to £160 million, driven by record sales of 3,934 homes.

Revenue increased 17% to £946.5 million and Bovis hiked its annual dividend by 14% to 40p a share, which is set to be approved at its AGM on Tuesday.

Anthony Codling, analyst at broker Jefferies, said: "Bovis reported a short and sweet trading update this morning. It appears to us the group has its head down and remains firmly focused on delivery. We advise investors to buy the shares.

"After announcing a raft of operational improvements last year Bovis appears to us to remain focused on execution. The changes appear to be working and the group is on track to deliver its planned growth."

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