Bovis Homes has delivered its best sales performance since the housebuilder floated in 1997, its chief executive David Ritchie said yesterday.
The clamour for homes – fuelled by a recovering economy, the Government’s Help to Buy scheme and easier mortgage lending conditions – means Bovis has now hit 90 per cent of its targeted sales for the year before the end of August. Mr Ritchie said: “I can’t remember the last time Bovis was 90 per cent sold for the year at week 32 – certainly not since the float.”
Bovis achieved 1,712 private reservations in the 32 weeks to 9 August, which was 43 per cent more than the same period in 2012, as builders enjoy the first significant recovery in the housing market since the credit crunch hit in 2007. Help to Buy was responsible for 500 reservations.
The builder posted a 19 per cent rise in pre-tax profits to £18.6m in the first half of the year, towards the top end of City forecasts. The interim dividend was increased by 33 per cent to 4p.
The group saw a 15 per cent rise in average selling prices in the first six months of the year, although Mr Ritchie attributed most of that to its continued shift towards selling bigger homes in more buoyant markets in the South, which account for three-quarters of the business. Despite fears of a house price bubble fuelled by Help to Buy, Bovis said the underlying market had only improved by “1 per cent to 2 per cent”.
Mr Ritchie said: “If you’re investing in the South and building more four-bedroom homes, you are going to get improvements in the mix.”
Bovis’ profits have also been boosted by opening more sales sites – up 11 per cent to 91 in the first half . Homes built on land snapped up at cheaper prices after the credit crunch are also fattening margins. Anthony Codling, at Jefferies, said annual profits for Bovis could hit £100m next year and added: “Help to Buy is accelerating the speed at which the group’s strategy is being executed."