Housebuilder on course for ‘significant’ profit growth in 2012

The number of house sales completed by Bovis Homes increased 8% in 2011, returning to more than 2,000 for the first time since the credit crunch.

In a trading update to the city in advance of full year profit for the 12 months to 31 December, the firm said it completed 2,045 sales, which included a rise of more than a third in the number of social housing completions. The last time it sold more than 2,000 homes was in 2007, when it completed 2,930 sales.

With the average sales price rising 4.5% to £180,000, the firm said recent trading leaves it on course to hit analysts’ expectations of £31m for the year. The operating profit margin will increase to approximately 10%, it said, up from 7.3% in 2010.

Despite market conditions remaining “challenging”, the firm said its expected 16% increase in sales outlets and continuing growth in average selling price meant it will achieve a “significant” increase in profit in 2012.

David Ritchie, chief executive of Bovis Homes, said: he was “delighted” with the improved returns delivered in 2011.

He said: “Based on current market conditions continuing, 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.”