Bovis remains upbeat with post-Brexit profits hike

Housebuilder Bovis Homes today shrugged off heightened uncertainty surrounding the Brexit vote to book a double-digit rise in profits.

Bovis enjoyed a rise in half-year profits. Picture: Chris Radburn/PA

The FTSE 250 firm said the “underlying market fundamentals” for the UK housing market remained positive, as pre-tax profits stepped up 15 per cent to £61.7 million in the six months to 30 June, up from £53.8m a year earlier.

Revenues climbed 18 per cent to £412.8m in the half-year period, building on the £350.7m recorded for the first half of 2015.

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Bovis added that the number of new homes it completed rose 5 per cent to 1,601 compared to last year, while the average selling price lifted 14 per cent to £254,500.

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Chief executive David Ritchie said the rise in profits came after the firm built a record number of homes in the first half of 2016.

“Whilst it is too early to judge the impact of the EU referendum and the Bank’s monetary policy response on the UK housing market, the underlying market fundamentals for UK housing remain positive,” he added.

“We have been pleased with the resilient level of interest shown by potential home buyers contacting us. Our robust balance sheet, with debt lower than last year, means that we are well positioned to continue to take advantage of prime land opportunities at potentially higher returns.

“Overall, we remain confident in our strategy to deliver long-term growth in shareholder returns.”

The bright performance from Bovis comes amid a string of gloomy reports for the construction sector, suggesting the UK economy is in line for an economic slowdown.

The construction industry fell back into recession for the first time in four years in the run-up to the EU referendum, with the Office for National Statistics (ONS) reporting a 0.7 per cent drop in construction output during the second quarter, following a 0.3 per cent fall in the first three months of the year – meaning the industry recorded two consecutive quarters of negative growth for the first time since 2012.

Meanwhile, the latest Markit/Cips construction purchasing managers’ index (PMI) showed that the construction industry recorded its fastest fall since June 2009, hitting 45.9 in July, down slightly from 46 in June but above economists’ expectations of 44.