The surging housing market has buoyed Bovis Homes to post a record number of completions on new homes – enabling it to significantly increase its dividend.
Bovis completed a record 1,525 new home legal completions in the first half of the year, up from 1,487 in 2014. The average price on legal completions rose six per cent to £222,000, up from £210,000 a year ago.
The number of homes expected to legally complete by the end of 2015 is tipped for 3,505, up from 3,297 in 2014.
The housebuilder has already secured consent for 2,944 plots of land across 17 sites.
As a result, it plans to increase its dividend by 14 per cent to 13.7p per share, up from 12p per share last year.
Bovis has net debt of £60m, compared with net cash of £5m in December and net debt of £48m a year ago, but this is down to “the significant investment in consented land in the first half year”.
Why it's interesting:
Bovis offers some useful insights into the housing market, not least that it expects more legal completions to go through in the second half of the year than last year, when 41 per cent of deals went through.
Excluding social housing, private sales prices increase 10 per cent to £264,000.
Housing production is currently 13 per cent ahead of 2014, which Bovis said “provides a strong base for the planned volume growth for 2015”.
The group remains on track to deliver its expected total volume of legal completions for 2015.
What they said:
Chief executive David Ritchie said: "The group has delivered a record number of first half legal completions, made possible by the high quality land investments made during the last few years.
“We continue to trade well in a positive UK housing market delivering a strong forward sales and build position on an increased number of sales outlets. As a result we are on track to deliver our expected growth for 2015 and a further increase in return on capital employed supported by robust profit margins and improved capital turn.
“Future growth in shareholder returns is being underpinned by further disciplined investment in new consented and strategic land."