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New Homes House builder Bovis Homes, continues its growth strategy





BOVIS HOMES GROUP PLC
RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2015
Strong financial performance and dividend growth reflect successful delivery of strategy
Bovis Homes Group PLC today announces its half year results for the six months ended 30 June 2015.
Financial and operational highlights for H1 2015
H1 2015
H1 2014
Change
Revenue
£350.7m
£322.1m
+9%
Operating profit
£54.3m
£51.2m
+6%
Net profit *
£56.0m
£51.3m
+9%
Net profit margin
16.0%
15.9%
+0.1ppts
Profit before tax
£53.8m
£49.4m
+9%
Basic earnings per share
32.1p
28.8p
+11%
Dividend per share
13.7p
12.0p
+14%
Return on capital employed **
15.6%
13.4%
+2.2ppts
Net debt
£58.8m
£45.3m
* Net profit is operating profit plus Group share of joint venture profits
**Return on capital employed ("ROCE") is net profit for 12 months to 30 June divided by average of actual opening and closing invested capital
  • Record number of legal completions at 1,525 homes (H1 2014: 1,487 homes)
  • Average sales price on private legal completions, excluding PRS homes, of £264,200, 10% higher than H1 2014 (£239,500) driven by mix and improvements in market house prices
  • 2,687 consented plots on 15 sites added to the land bank in the first half with a further 573 plots on five sites added since 30 June 2015
  • Consented land bank of 19,081 plots on 135 sites at 30 June 2015 (31 December 2014: 18,062 plots; 128 sites)
  • Strong investment in strategic land with the Group holding 23,287 strategic plots across 86 sites (31 December 2014: 21,350 strategic plots; 76 sites)
  • Average active sales outlets in the first half year of 100 (H1 2014: 93), an 8% increase
Current trading and outlook
  • Cumulative sales achieved to 14 August for 2015 delivery of 3,768 homes, with the Group on track to achieve expected volume for full year
  • Production achieved to 14 August 11% ahead of the same period in 2014 provides strong base for delivery of the planned volume for 2015 and work in progress for 2016
  • Capital turn in 2015 expected to be in excess of 1.0 times with improving net profit margin, leading to strong increase in ROCE
Flexible strategy to deliver strong returns and reach steady state output
  • Focused on growth during positive housing market conditions with continuous assessment of housing cycle
  • Taking advantage of significant land acquisition opportunities at higher ROCE
  • Evolving Group structure to manage future growth
  • Increased revenue with improved capital efficiency driving higher financial returns
  • Confidence in delivery of strategy supports intention to pay a dividend of 40 pence per share in 2015 (2014: 35 pence)


Commenting on the results, David Ritchie, Chief Executive of Bovis Homes Group PLC said:
"We have delivered a strong first half performance in 2015 with a record number of legal completions and a further improvement in return on capital employed. Our long term land investment in high quality locations, including delivery from strategic land, is providing a consented land bank which supports growth in active sales outlets leading to increased volumes.
I am pleased to report that significant land opportunities continue to be available at higher returns meaning disciplined investment in consented land should underpin future growth in shareholder returns. With positive market conditions prevailing, we continue to assess the housing cycle and will adapt our strategy appropriately. We anticipate that the addition of around 40 sites per annum will support our medium term growth strategy to deliver volumes of between 5,000 and 6,000 new homes each year.
For 2015, we are on track to deliver our expected volume of new homes and remain confident in our outlook for the year as a whole. The combination of strong revenue growth and higher profit margins with improved capital efficiency will drive higher capital turn and return on capital employed. With this anticipated improvement in returns, the Board intends to increase the full year dividend to 40 pence per share."