Sales surge at Bovis points to new hope of housing ‘spring bounce’

The Kent-based builder added that sales prices have been modestly ahead of its hopes.

It announced a 74 per cent jump in profits to £32.1 million for 2011 and said the signs were positive for the current year after receiving 26 per cent more sales enquiries than a year ago in the eight weeks to 24 February.

Redrow, Barratt Developments and Galliford Try have also reported improved results in the last week as margins benefit from the buying of land at lower prices during the downturn and improved sentiment.

While first-time buyers will start paying stamp duty again next month, builders hope that the government’s mortgage indemnity scheme, which guarantees to underwrite losses on new build properties in England to help new buyers borrow up to 95 per cent of the value of their home, will stimulate demand.

Pre-tax profits of £32.1m were slightly higher than some City estimates, while Bovis increased its full-year dividend by 67 per cent to 5p a share. It completed 2,045 house sales in 2011, an increase of 8 per cent on a year earlier, with an average price of £180,100.

Chief executive David Ritchie said: “Bovis has made significant progress in 2011, delivering a strong improvement in profits and earnings against a backdrop of challenging, but stable, market conditions.”

Investec Securities analyst Mike Bessell said: “Given the strong current trading, we see scope to upgrade our forecasts.”