Bovis forecasts growth in 2012

British housebuilder Bovis Homes said it expected to achieve a significant increase in profit in 2012, benefiting from forward bookings rising by more than a third, following strong earnings growth in 2011.

The company said it expects to report overall completions up 8 percent to 2,045 homes in 2011, with private legal completions up 18 percent in the year.

Bovis, one of the smaller UK-listed housebuilders, sees its 2011 pretax profit in line with expectations while forward sales at the start of January were up 35 per cent year-on-year standing at 568 homes, thanks to a rise in private and social housing reservations.

"The group can deliver significantly increased profit and, coupled with improving efficiency of capital employed, a stronger return on capital employed in 2012 and beyond," said chief executive David Ritchie in a statement on Monday.

Larger peers Barratt and Persimmon both said that positive trends in the Autumn trading period had continued into the new year, with sales and profits rising, despite little help from overall housing market.

The prospect for homebuyers in the UK however is more bleak, with the number of first-time buyers plummeting to a record low in 2011, despite prices dropping and number of government measures such as FirstBuy and a mortgage guarantee scheme.

Bovis said the average sales price rose 4.5 per cent to £180,100 in 2011.

Keith Bowman, equity analyst at Hargreaves Lansdown said: “As with rivals, Bovis is pointing towards an ongoing strong rebound in profitability, driven by the now familiar themes of cost cutting and new site openings on land acquired at more competitive prices.

"A change in the build mix towards family sized homes and an emphasis on the more buoyant South have increased sale prices, whilst the Government backed mortgage indemnity scheme is expected to play its part going forward."