Bovis enjoys strong 2014 as sale prices increase

Help to Buy has offered some support to builders. Picture: Getty

The Kent-based firm reported a 69 per cent rise in pre-tax profits to £133.5 million in the year to the end of December after it saw completions jump 29 per cent to 3,635 homes.

It added that it had secured 479 private reservations in the first seven weeks of this year, up 2.4 per cent on a year ago, with sale prices also ahead by 2 per cent year on year.

The group, which concentrates on family housing in the south east of England, said sales were boosted by the UK government’s Help to Buy scheme in the first half of last year, but new rules on mortgage availability resulted in a weaker second half.

It added that its average 2014 selling price rose 11 per cent to £216,600.

Bovis said: “The strong sales position brought forward from 2014 combined with robust trading in the first seven weeks of 2015 has positioned the group well for 2015.”

The FTSE 250 firm said it would lift its full-year dividend to 35p, an increase of 159 per cent. It added that it intends to pay a dividend of at least 35p a share in 2015.

Chief executive David Ritchie said the firm would follow its plan for growth laid out at its half year results last August.

He said: “This plan envisages the business, in a stable housing market, delivering sustainable growth over the next few years to annual volumes of between 5,000 and 6,000 new homes.

“We are on track to deliver this strategic plan, supported by record land investment in 2014 at the right point in the cycle.”

The group said last year it added 7,300 plots on 42 sites to the consented land bank at a cost of £340m as it acquired land, primarily in the south east.

Robin Hardy, an analyst at Shore Capital which has a “buy” rating on the shares, said it was a solid start to 2015 but he was sticking with a 990p price target.

But he noted that with the shares now trading at close to that level, “there is limited value left in this”.

Brokers at Jefferies also commented “we are mindful of the fact that the land market will not remain benign forever”.

Bovis is the latest housebuilder to report buoyant trading. Last month, Barratt announced a boost to the Scottish economy as it unveiled plans to ramp up its activities north of the Border over the next six months, safeguarding and creating thousands of jobs.

The FTSE 100 firm will break ground on up to 13 sites, making a start on developments that will eventually contain some 2,100 homes. The firm said it mostly employs local sub-contractors and tradesmen, and its latest push will “underpin around 4,000 existing and newly created jobs”.

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