Bovis revives divi as profits beat consensus

14th Jan 2011 07:03

Bovis Homes predicts profits for 2010 will beat consensus estimates, good enough for the housebuilder to begin paying dividends again.A "significant" improvement in profits to more than £16.3m has been driven by a 5% increase in the number of legally completed homes to 1,901 at an average sale price of £160,700, up 4% on the year before.That's good news for shareholders who'll start receiving dividends again. Cheques will be in the post in May.Gross margin increased thanks to better sale prices and the benefit of build cost savings, mostly on second half legal completions. Operating profit margin for 2010 is expected to be at least 7%. The company grew its land bank by about 3,700 plots in 2010, mostly in the south of England. That cost the firm £203m, though the gross profit potential is put at £181m. Terms have been agreed on another 2,500 plots.Trading conditions in 2011 are expected to be subdued relative to historical levels and mortgage approval volumes remain weak, admitted Bovis."This all said, the long term imbalance between the demand and supply of housing remains positive for the housebuilding sector," the company believes. "With the strong investments made during 2010 and the ability to continue land investment at attractive rates of return into 2011, the group is confident of its ability to deliver on its growth strategy, which will add significantly to future shareholder value." Results for the year ended 31 December 2010 are out on 14 March.