Lower costs help Bovis double profit

Bovis Homes has restored its interim dividend for the first time in three years after a "significant" reduction in construction costs helped it more than double its first-half profits.

But David Ritchie, the chief executive of the house builder, said the property market would remain sluggish until lenders make a greater number of mortgages available to first-time buyers at more affordable loan-to-value ratios.

Bovis has benefited from an aggressive strategy of snapping up quality land – primarily in the south of England – since 2009. It added 1,571 land plots on nine sites in the first half of the year and has agreed to buy a further 2,500 plots on 20 locations.

Pre-tax profits at Bovis soared 131 per cent to £8.1m, on revenues up by 16 per cent to £134m over the six months to 30 June. This was largely driven by a sharp reduction in its construction costs since the end of 2009, with Bovis negotiating prices for sub-contracted labour, such as bricklayers, down by 20 per cent.

Mr Ritchie said: "Any company that can double its profits in the current environment must be pleased." While he also pointed to its acquisition of higher-margin quality sites, Mr Ritchie said "all the improvements in our profits have come from the efforts we have made in reducing our cost base".

The group completed the sale of 801 homes in the first half, compared with 803 last year. But this flat performance was more than offset by a 3.2 per cent rise in average selling prices to £163,400. As a result of the jump in profits, Bovis has reinstated its interim dividend at 1.5p – for the first time since 2008. It paid a final dividend last year.

Bovis also boasted "strong trading" through the first 34 weeks of 2011, with a 19 per cent rise in private reservations to 1,087, compared with 912 homes last year.

However, Bovis said it had received no help from the wider housing market, which "remains significantly constrained by continued restricted mortgage availability at higher loan-to-value rates". Mr Ritchie said: "The mortgage market needs to become more liquid and to support first-time buyers to a greater extent."

But on the wider economy, he said: "I cannot see any reason why we would have a double-dip recession."

Start your day with The Independent, sign up for daily news emails
Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
News
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
news
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before