Bovis Homes FY profit rises 48 per cent on strong demand

24th Feb 2014 07:16

Housebuilder Bovis Homes is cashing in on a big rise in demand in the UK housing market as it posted a 48 per cent increase in profit and said it was confident of achieving strong 2014 results.Bovis said private forward reservations last year had risen 178% to 692 homes from 249 in 2012 as it increased production by 26% to 2,935 homes.The group is benefiting from a housing market recovery lifted by British government incentives such as Help to Buy, although experts have voiced concern that it could lead to a house price bubble as demand outstrips supply.Bovis said its average sales price had increased 14% to £195,100, which it attributed mainly to a switch to building larger homes and a greater proportion of more expensive sites in the south of England.Pre-tax profit in the year to December 31st rose to £78.8m from £53.2m a year ago on a 31% lift in revenue to £556m.Chief Executive David Ritchie said its new financial year had begun well, with sales prices achieved to date being about 2% above group expectations.Private reservations achieved in the first seven weeks of 2014 were 468, 64% up on the 285 in the same period in 2013.Ritchie said: "A rigorous focus on targeted land acquisition, together with tight management of costs and capital have enabled the Group to take full advantage of the more favourable market conditions to increase volumes, improve sales prices and strengthen margins."The housing market is recovering with higher activity levels and improving house prices expected to more than compensate for supply chain cost increases."With the current strong sales position and assuming current market conditions continue, the Group is confident of its ability to deliver strong increases in volume, revenue and profit in 2014."PW