Bovis runs rule over merger candidates
Tuesday 16 March 1999
The chief executive, Malcolm Harris, yesterday said the company had held informal talks with several medium-sized housebuilders in the past year but had still not find the perfect partner. "We have spent the last year talking to a number of companies, but we will only merge if it added value for shareholders in the long term."
Mr Harris said Bovis wanted an agreed merger and was not prepared to mount a hostile bid. If a friendly link-up did not materialise, Bovis could spend its pounds 100m cash pile to buy an unquoted regional housebuilder.
The ideal target would have operations in the Midlands, the North and the South-west to complement Bovis's strength in the South, the chief executive said.
The company's hand in any merger talks was strengthened by yesterday's good maiden results. Bovis posted a 21 per cent rise in pre-tax profits to pounds 45m despite a 10 per cent fall in completions to 2,303. Tight cost control and a rise in selling prices pushed up margins to 19.3 per cent from 15.4 per cent in 1997.
The results boosted Bovis shares, which rose by 12p to 273.5p, highest since their 200p flotation.
Mr Harris predicted strong growth in the housing market this year. He said buyers were enjoying the "best market conditions for 25 years" with falling interest rates and rising personal earnings.
Mark Hake, building analyst at Merrill Lynch, said Bovis's four-year landbank - one of the industry's longest - would help it exploit the turnaround in the market. The landbank would limit the risk of a sharp fall in margins, boosting the stock's defensive qualities.
Mr Hake rates the shares, on around eight times 1999 forecast earnings of pounds 51m, a "buy", noting that despite yesterday's rise they are still at a 10 per cent discount to the sector.
- 1 Autism 'caused by genetics', study suggests
- 2 What happens to your body when you give up sugar?
- 3 Why you should never make assumptions about people with autism
- 4 Tourist films plane's descent just metres above packed Caribbean beach
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Tourist films plane's descent just metres above packed Caribbean beach
Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
How Homer Simpson discovered the Higgs boson over a decade before scientists
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Harrison Ford plane crash: Star Wars actor 'seriously injured' after light aircraft crash lands
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
Nigel Farage promises Ukip will not 'stigmatise' would-be migrants – and says he wants 'everyone to speak the same language'
iJobs Money & Business
£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...