Belfast Telegraph

Bovis shrugs off Brexit bump to predict record annual revenues

Housebuilder Bovis Homes said it was on track to deliver record annual revenues despite a Brexit bump in the road.

The FTSE 250 firm said profits would rise thanks to a 10% jump in the average sales price, coupled with 5% year-on-year growth in the number of legal completions .

Bovis continued to shrug off uncertainty surrounding the Brexit vote , stating that "a side from the weeks immediately after the EU referendum", its annual sales had followed the "normal seasonal pattern".

Shares were up more than 2%.

Chief executive David Richie said: "Another year of both growth in volume and increase in average sales price is expected to deliver record revenues for the group in 2016.

"As a result, we are on track to deliver increased profit and a further improvement in return on capital employed, in line with our expectations."

On site production rose 5% compared to last year, but it warned that the dearth of available workers was pegging back activity.

"Housing market fundamentals remain supportive despite greater market uncertainty and we continue to manage the business through the cycle to deliver sustainable shareholder returns," he added.

The trading update comes after the latest PMI report revealed that a ''solid'' rise in housebuilding work had helped construction activity hit a seven-month high in October.

But it said firms were suffering from Brexit uncertainty and the soaring costs linked to the plunge in the value of the pound.

George Salmon, equity analyst at Hargreaves Lansdown, said the housing market was proving an enigma, with housebuilders taking a business as usual approach, while surveys show a slowdown in transactions and prices.

"That contradiction is in evidence again today, after Bovis reported that demand continues to outstrip supply, and building is ramping up. So what is going on? One possible explanation is that the housing market is less uniform than one might think.

"The Government's many initiatives to support the housing market are particularly geared to new builds and first time buyers - helping builders buck the trend of a wider slowdown.

"However, those policies are from the George Osborne playbook, and the new Chancellor has already hinted at a change of tack."