Bovis’ after-tax profit increased 32% compared with the same period last year, and the Lend Lease group as a whole enjoyed an after-tax profit surge of 50%, from £53.9m to £80.7m.
However, Australian-based Lend Lease, under pressure after several years of disappointing results, is understood to be considering splitting the group in two.
One option would be to keep the property services business, which is made up of property development and construction, including Bovis. That would leave a property investment business, built around the group’s funds management division, which could be sold.
Bovis sources say Lend Lease’s future policy will depend on who takes over from outgoing chief executive David Higgins. An appointment is expected in the next few months.
The uncertainty over the future of Lend Lease has led to speculation that Bovis management may consider launching a bid for the business.
Bovis European chief executive John Spanswick said Bovis had won a record amount of work during the financial year. He said: “We’ve had a record year in terms of work won. We’ve won £1.3bn of new contracts in the UK alone.”
Turnover in Europe reached £1.2bn in the year to 30 June, of which 80% was in the UK. Bovis’ US arm has been helped by a contract to clean up Ground Zero in New York.
In the UK, Bovis continued to win PFI contracts, securing four hospital deals and three school projects. This raised Bovis’ PFI bid costs substantially, but the group would not reveal what they were.
Spanswick said the high PFI bid costs meant Bovis had to maintain its success rate. “Providing we are winning our fair share of these deals, the costs are not too high,” he said.
He added that although the commercial sector had performed well and there was no sign of a slowdown, the firm realised such strong performance could not carry on indefinitely. Bovis has two more years of work on current schemes.