The economy may be flirting with a double-dip, but there is scant sign of recession from housebuilder Bovis Homes, which yesterday bullishly flagged up a "significant increase" in its 2012 profits.
Bovis is paying more attention to the lucrative southern England housing market, which should account for 75 per cent of its sales in future compared with about half before the housing crash in 2007.
The 4.5 per cent rise in average selling prices to £180,100 in 2011 was almost entirely accounted for by family homes in the South, as affluent buyers and a more acute shortage of homes kept prices buoyant.
Despite the southern push, the chief executive David Ritchie has no plans to crack the capital: "London isn't our bag. We'll develop within the M25 but we're not a city-centre builder."
At the turn of this year, Bovis had orders for 566 homes, up 35 per cent on a year earlier.
Even based on current market conditions – hardly boom territory – profits will be buoyed by more sales, increased margins on land bought more cheaply after the crash, and higher selling prices from the southern drive. The housebuilder will also open more sales outlets and expects to add another 20 sites to its landbank this year.
Deutsche Bank's analyst Glynis Johnson reckons pre-tax profits will jump more than 50 per cent to £48m this year from about £31m in 2011.
The company's shares yesterday added 0.5p to 453.6p.Reuse content