VTY Vistry Group Plc

    


Bovis Homes Group PLC



                              Bovis Homes Group PLC

                          Interim Management Statement

                               Tuesday 6 May 2008

Bovis Homes Group PLC is holding its Annual General Meeting at 11:30am on 9 May
2008 at the New Connaught Rooms, 61-65 Great Queen Street, London. In advance of
the AGM, this interim management statement comments on the financial performance
of the Group for the period from 1 January 2008 to the date of this statement
and on the outlook for the current financial year.

At the time of its preliminary results announcement for the year ended 31
December 2007, issued on 10 March 2008, the Group commented that the short term
outlook for the housing market in 2008 remained uncertain, with a reduced
availability of mortgage finance adversely impacting the housing market, and
reducing consumer confidence.

More recently, conditions in the housing market have deteriorated sharply. Well
publicised negative developments in the mortgage market have continued apace,
with a large number of mortgage products being withdrawn, mortgage interest
rates and fees being increased and more substantial deposits being required by a
range of different lenders. This, together with a general reduction in the
quantum of mortgage finance availability, has contributed to a much reduced
volume of mortgages being approved, such that the British Bankers Association
has reported a 46% decline in the number of mortgage approvals for house
purchases in March 2008 compared to March 2007. Combined with ongoing adverse
press speculation about the housing market, this is making homebuyers markedly
more cautious.

As a result, the Group's reservation levels since the date of the preliminary
results announcement have been disappointing. Reservations achieved to date for
2008 total 1,382 homes as compared to 1,979 reservations at the same time in
2007, a decrease of 30%. Housing gross margins for private reservations achieved
to date in 2008 have been maintained at high levels. However, if the recent more
difficult conditions in the housing market persist, and the level of
reservations, allied with the increase in cancellation rates, seen in recent
weeks does not improve, the Group will not be able to achieve a volume of legal
completions in 2008 that falls within the range of the Board's expectations at
the time of the preliminary results announcement.

In light of the recent market deterioration, the Board now expects that the
Group's results for the first half of the year to 30 June 2008 will be
significantly lower than it had previously anticipated and that with ongoing
market uncertainties, the outlook for the remainder of 2008 is difficult to
predict.

The timing of any improvement in the housing market is uncertain and, therefore,
the Group is positioning itself to allow it to trade across a range of differing
market outcomes. Whilst the Group continues to seek to maximise sales values in
those locations where market conditions remain orderly, sales prices have been
and will be adjusted, where appropriate, to reflect local market conditions. A
number of measures are being put into place to manage cash flows in relation to
land, construction work in progress and overheads. The Group anticipates opening
a number of new sales outlets over the next few months, with investment being
cautiously controlled, again based on local market conditions. This will
increase the Group's opportunities for reservations from these new sales outlets
and should allow returns to be achieved as early as possible on consented land
owned by the Group.

Whilst the short term trading environment remains unfavourable, the Group
continues to work on sustaining a high quality land bank to underpin future
profitable growth through strategic conversion, and the number of plots in its
land bank has increased since 1 January 2008. The Group has achieved residential
planning consent on circa 5,400 plots of strategic land, circa 3,200 plots of
which are now owned and included in the consented land bank. The remaining 2,200
plots are held under long term option by the Group. The consented land bank now
stands at circa 14,000 plots, with approximately 50% of this land bank
originating as strategic land. Notably, residential planning consent has been
achieved during 2008 on the Group's major strategic investments at Filton, north
Bristol, and Wellingborough. These two sites provide the Group with high quality
land in good locations.

The Group has bilateral committed loan facilities totalling �220 million which
do not mature until 2010. Net borrowings currently stand at circa �92 million,
which is in line with the Group's expectations as it approaches its normal
first-half year borrowing peak in May.

The Board continues to act in the long term interests of its shareholders.
Whilst acknowledging that short term profits are adversely affected by current
market conditions, the Group's long term investment strategy in land for
housebuilding will assist the Group in delivering sustained good medium and long
term performance. The underlying shortage of houses in the United Kingdom, as
evidenced by the Government's ambition to deliver three million new homes by
2020, will underpin housing market activity in the future. With modest gearing
and a strong consented land bank, Bovis Homes remains well positioned to benefit
from improved housing market conditions when they arise.

Conference Call for analysts

Please note that Malcolm Harris, Chief Executive, David Ritchie, Group Managing
Director and Neil Cooper, Group Finance Director of Bovis Homes will host a
conference call at 09:00am today, Tuesday 6 May 2008, to discuss this statement.

To access the call please dial 020 8515 2301 and ask for the Bovis Homes Interim
Management Statement conference call. Please dial in 5 minutes prior to the
start of the conference call to allow time for registration.

For further information, please contact:

Bovis Homes Group PLC
Tel: 020 7321 5010
Malcolm Harris, Chief Executive
David Ritchie, Group Managing Director
Neil Cooper, Group Finance Director

Shared Value Limited
Tel: 020 7321 5010
Andrew Best
Emily Bruning

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