Bovis Homes Group BVS Interim Management Statement

  Bovis Homes Group (BVS) - Interim Management Statement

RNS Number : 8285Q
Bovis Homes Group PLC
12 November 2012




12 November 2012

                            Bovis Homes Group PLC

                         Interim Management Statement

   Expected returns on track for 2012 combined with strong land investment



Bovis Homes Group PLC is today issuing an Interim Management Statement for the
period from 1 July 2012.



Current trading



The Group has now secured  sufficient reservations to deliver its  anticipated 
full year  legal completions.  Net private  reservations achieved  in the  45 
weeks to 9 November 2012 were  1,669 (2011: 1,517). Net reservations per  site 
per week for this period have averaged 0.46, in line with the rate achieved in
the same period in  2011. The average number  of active sales outlets  during 
this period has increased  by 12%. The Group  is currently operating from  83 
active sales outlets and expects  the number at the  year end to approach  90, 
with in excess of 30 new sales outlets launched during 2012.



Average sales price  achieved in  the year  to date  for private  reservations 
expected to legally complete  in 2012 is circa  £190,000, which compares  with 
£180,100 achieved  on  private  legal  completions  in  2011.  This  increase 
reflects an improvement in the sales mix by location and size of home. Prices
in the housing market are broadly stable with prices being generally  stronger 
in the south of England.



Land acquisitions



The Group has continued to invest  assertively in good quality consented  land 
and has now acquired 2,331 consented plots on 16 sites during 2012, mainly for
family homes located in  the south of England.  These sites in aggregate  are 
anticipated to  deliver, as  a minimum,  the Group's  hurdle rates  for  gross 
margin and ROCE, based on current sales prices, build costs and sales  rates. 
There are currently a further circa 1,000 consented plots on eight sites where
the Group is in the final stages of acquisition.



In addition, circa 750 plots across eight sites, which are awaiting conditions
to be satisfied, are contracted and are expected to be added to the  consented 
landbank in the near future. Beyond these, the pipeline of both consented  and 
strategic land  remains  strong,  giving  the Group  confidence  that  it  can 
continue to deliver in line with its growth strategy.



Financial Position



On 9 November 2012, the Group had net debt of £65 million. Given the  phasing 
of housing revenues  relative to land  and construction cost  cash flows,  the 
Group expects to move towards a net cash position at the year end.



Outlook



As at  9 November  2012, cumulative  sales achieved  to date  and expected  to 
legally complete during 2012  were circa 2,350  homes. With the  significant 
increase in  private average  sales prices  due to  improving mix,  the  Group 
remains on track to deliver a strong increase in revenue in 2012.



The gross  profit  margin for  2012  is expected  to  increase to  circa  22%, 
reflecting the increasing  proportion of homes  sold on post-downturn  sites. 
Combined with  the benefit  of improving  overhead efficiency,  the  operating 
margin for 2012  is expected to  be circa 13%,  significantly ahead of  2011's 
operating margin of 10%.



This significant increase in operating  margin combined with improved  capital 
turn will provide an increase in ROCE to approaching 7.5% for 2012 from 5%  in 
2011. Subject to stable market conditions continuing, the Group is  confident 
that it can deliver further growth in revenue with strong increases in  profit 
margins. This profit growth combined with a stable capital base will  deliver 
further strong improvements in ROCE in 2013 and beyond.



Enquiries: David Ritchie, Chief Executive

 Jonathan Hill, Finance Director

 Bovis Homes Group PLC

Tel: 07855 432 699



Andrew Jaques/Reg Hoare/James White

MHP Communications

Tel: 020 3128 8100



Conference Call for analysts



David Ritchie, Chief Executive, and Jonathan Hill, Finance Director, of  Bovis 
Homes will host a conference call at 08:30 today, Monday 12 November 2012,  to 
discuss the Interim Management Statement.



To access  the  call please  dial  +44 (0)20  3140  0668 and  quote  passcode: 
746766#. Please dial in 5 minutes prior  to the start of the conference  call 
to allow time for  registration. A recording of  the conference call will  be 
available until midnight on 13 December 2012 on 020 3140 0698, accessible with
the passcode 387881#.



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Certain  statements  may  be  forward  looking  statements.  Forward  looking 
statements involve evaluating a number of risks, uncertainties or  assumptions 
that could cause actual results to  differ materially from those expressed  or 
implied by  those  statements.  Forward  looking  statements  regarding  past 
trends, results or  activities should not  be taken as  a representation  that 
such trends,  results  or  activities  will continue  in  the  future.  Undue 
reliance should not be placed on forward looking statements.

                     This information is provided by RNS
           The company news service from the London Stock Exchange

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