Bovis on track for record profits
The firm expects full-year profit to come in at the top of expectations.
Bovis Homes has become the latest housebuilder to shrug off uncertainty in the property market by posting a hefty rise in half-year profit.
The company booked a 41% rise in pre-tax profit to £60.2 million in the six months to June 30, ahead of expectations.
Revenue came in 1% higher at £432.2 million and the firm now expects full year profit to come in at the top of expectations.
The company said strong customer demand, attractive mortgage rates and Government initiatives, in particular Help to Buy, are helping drive sales.
Boss Greg Fitzgerald said: “We delivered a strong performance in the half, with a more than 40% increase in profits.
“This reflects the excellent progress made across all business areas over the past 18 months and a step change in the quality of the homes we are building and level of service we are providing our customers.
“We are confident in the outlook for the business and are targeting a record year of profits in 2018, at the top end of the noard’s expectations.”
Bovis is the latest housebuilder to post a strong update, following recent figures from Barratt and Berkeley.
The positive comments come despite reports surfacing over the weekend that Help to Buy will be scrapped in 2021, as well as warnings from rival firms over Brexit.
Bovis, which had been dogged by complaints over unfinished homes with electrical and plumbing faults, also said it has seen a significant improvement in customer satisfaction.
Bovis completed 1,580 homes in the half-year, up just 4%, confirming a building slowdown as it focuses on quality.
The average selling price on completion remained flat at £334,700.
Shares were up over 2% in morning trade.
Charlie Campbell, analyst at Liberum, said: “New management is delivering margin improvement faster than expected through self-help measures (mostly doing things right first time in a more disciplined manner) and after ‘robust summer trading’.”