Housebuilder will recommence dividend payments as average sales price rises 4%
Profits at Bovis Homes will exceed market expectations for 2010, the housebuilder said in a trading statement today.
Improved sales prices, build cost savings and stable overheads will see the group achieve a profit margin of at least 7% for last year.
Bovis defied the downward trend in house prices to increase its average sales price to £160,700, 4% higher than the equivalent of £154,600 in 2009.
This increase was driven by growth in the group’s average private sales price to £172,400 from £165,500 in 2009.
Bovis will recommence paying dividends to shareholders.
Net cash at the firm was down to £52m at 31 December from £113m at the start of 2010. However, the drop masked much larger outflows of £138m on land investments, which were partially compensated for by cash inflows of £93m before the land expenditure.
The group said it expects to deliver growth in 2011, despite subdued trading conditions.
David Ritchie, chief executive of Bovis Homes, said: “We are pleased with the positive group performance in 2010 and remain confident of our growth strategy through the acquisition of good quality residential land at attractive rates, which will provide an increase in sales outlets to support volume growth.
“Based on current market conditions this will deliver growth in profits and improved financial returns which will add significantly to future shareholder value.”