Bovis Homes increases profit to £18.5m on the back of a 6% sales rise
Bovis Homes increased its sales by 6%, to £298.6m, in its 2010 financial year, which ended 31 December. Sales in 2009 were £281.5m.
While it saw only a marginal increase in sales, higher margins resulted in a sharp uplift in pre-tax profits, which increased by 146%, ending the year at £18.5m, compared to £7.5m during 2009.
The firm is in a strong financial position, despite spending a net £137m on land. At the end of December its cash levels topped £52m, down from £112m because of its significant investment in land.
Around 3,700 plots were added during the year, taking the firm’s total land bank, with planning consent, to 13,766 plots. These plots have a potential gross profit of £461m, which is calculated using current sales prices and current build costs.
In a statement accompanying the results, Bovis said sales in the first nine weeks of 2011 have been “encouraging” and that reservations are up 11% on last year.
In a positive statement, the firm said it would open 33 new sites during the year as it targets sales growth.
Commenting on the results, Bovis chief execitive 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.
“The group has also made significant progress with its growth strategy through substantial land investment, a strong pipeline of further land acquisition opportunities and a strong expected increase in active sales outlets.
“Based on a continuation of current market conditions, this growth strategy gives the group confidence in delivering greater volumes and increased profits.”
Average selling prices in 2010 increased by 3.9% to £160,700, compared to £154,600 in 2009, as fewer “affordable” homes were built.