Bovis doubles profit on land grab policy

HOUSEBUILDER Bovis Homes yesterday said its 2010 profit more than doubled and that it had made an encouraging start to 2011.

Bovis reported a pre-tax profit last year of £18.5m, compared with £7.5m the year before.

The company had been expected to post a profit of £18.54m, according to a poll of analysts.

Chief executive David Ritchie said: “The group has delivered a strong improvement in profit in 2010, driven by increased volumes, stronger sales prices and delivery of cost savings.”

Bovis spent £203m on land in 2010, acquiring 3,700 plots mostly located in the south of England, and has agreed terms to buy another 2,500 this year, it said.

The average selling price of a Bovis home rose by 3.9 per cent to £160,700 in 2010, and the group achieved 1,901 completions in the year, up from 1,803 in 2009.

The company, which expects to open 33 new sales outlets in 2011, said it had made an encouraging start in the first nine weeks of the year, with reservations up 11 per cent.

The company said it would restore its dividend – with a proposed payment of 3p for 2010 – as a result of the positive figures. The last time a dividend was paid was 2008.

Economists are predicting a testing year for housebuilders and muted growth at best, as economic uncertainty and a struggle to access credit deter buyers from entering the market. Bovis said mortgage availability will continue to restrain buyers in 2011 but expects prices to remain stable as a whole.

The Kent-based group, which is debt free, added: “With the supply of consented land likely to be constrained in the future, given the planning environment we believe that this is an excellent time to invest.”