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 The West has it totally wrong on Lee Kuan Yew
- 2 Watch: Man takes selfie every mile of 2,600 mile hike, creates amazing timelapse video
- 3 The day I starred in Only Fools and Horses
- 4 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Germanwings captain Patrick Sondenheimer tried to break into locked cockpit door 'with an axe' as plane was descending
Saudi Arabia says it won't rule out building nuclear weapons
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
#FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Revealed: Putin's army of pro-Kremlin bloggers
Germanwings plane crash: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
Andreas Lubitz: Knee-jerk reaction to 9/11 enabled mass murder
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...