Broker snap: Bovis remains Killik's preferred housebuilder

9th Jul 2010 12:58

Bovis Homes remains Killik's favoured pick in the housebuilding sector, after what the broker described as a 'solid' first half trading statement."In the short term, the group is benefitting from the current surplus of land vendors over land buyers which is keeping land prices attractive. Further out, we believe the group will benefit from strong demand for new homes given the ongoing shortage of homes being built in England and Wales. So far this year, Bovis has added 1,900 consented plots to its consented land bank - at a land cost of £107m - and terms have been agreed to acquire a further 2,500 plots," notes Jonathan Jackson, head of Equities at Killik."The shares trade on a 35% discount to the historic tangible net asset value (520p), a level which we believe more than discounts our concerns over the medium-term outlook for the UK housing market. We therefore reiterate our Buy recommendation," Jackson concluded.