Broker snap: Bovis still a 'hold' but results are strong, says Panmure

20th Aug 2012 10:46

Panmure Gordon has upgraded its full-year forecasts for Bovis Homes after the house-builder's interim results came in ahead of expectations."Whilst our recommendation remains 'hold' on valuation grounds, it is clear that the group is making strong progress against a stable market backdrop," Panmure said.Profit before tax (PBT) came in at £16.2m, up 100% year-on-year and ahead of the broker's £12.5m forecast. While volumes and selling prices were broadly in line, net interest payable and net margin beat predictions (the latter was 10.3%, 30 basis points above estimates).Panmure has raised its full-year PBT forecast from £47.6m to £51.3m, while the dividend per share estimate was lifted from 7.0p to 9.0p.The broker has raised its target price for the stock from 500p to 504p, which reflects a price-to-net asset value multiple of 0.89 times. "Looking at the mix of old/new land within the landbank at the current time, this looks sensible to us. We therefore maintain our 'hold' recommendation on valuation grounds for now," the broker said.By 10:20, shares were up 2.03% at 503p.BC