BW20020908002012 20020909T060051Z UTC
( BW)(BOVIS-HOMES-GROUP)(BVS) Interim Results
Business Editors
UK REGULATORY NEWS
LONDON--(BUSINESS WIRE)--Sept. 9, 2002--
BOVIS HOMES GROUP PLC
INTERIM RESULTS
Unaudited results for the six months ended 30 June 2002
Issued 9 September 2002
The Board of Bovis Homes Group PLC today announced its interim results for 2002.
o Pre tax profit increased 45% to #41.5 million (2001: #28.6 million)
o Earnings per share increased by 44% to 25.2p (2001: 17.5p)
o Operating margin increased to 22.1% (2001: 21.8%)
o Plots with planning consent at 10,406 plots (Dec 2001: 10,326 plots)
o Strategic land holdings increased to 20,118 potential plots (Dec 2001: 19,847 potential plots)
o Interim dividend increased by 9.5% to 4.6 pence net per ordinary share (2001: 4.2 pence)
o Period end net borrowings of #33.0 million (9.1% gearing)
Commenting on the results, Malcolm Harris, the Chief Executive of
Bovis Homes Group PLC said:
"The first six months results are excellent with all key
objectives having been met or exceeded. The planned expansion of
the business is on track to deliver the anticipated increase in
turnover and profit underpinned by additional investment in both
consented and strategic land holdings. Cash management has been
particularly successful notwithstanding the further strengthening
of the asset base of the Group.
Sales reservations, contract exchanges and legal completions to
date are well ahead of the comparable period last year. Based upon
current market conditions we are confident of the prospects for
the Group for the full year and are well placed to deliver good
results in 2003."
Enquiries: Results issued by:
Malcolm Harris, Chief Executive Andrew Best / Emily Bruning
Bovis Homes Group PLC Shared Value Limited
on Monday 9 September on Monday 9 September
Tel: 020 7321 5010 Tel: 020 7321 5010
thereafter
Tel: 01474 872427
Chairman's interim statement
Bovis Homes has generated excellent results during the first half of
2002 substantially increasing pre tax profits, enhancing the operating
margin and delivering a strong positive cash flow. The Group has made
progress towards one of its major objectives of balancing profits
between the first and second trading periods.
Results
For the six months ended 30 June 2002 the Group achieved a pre tax
profit of #41.5 million representing an increase of 45% over the pre
tax profit of #28.6 million for the same period in 2001. Earnings per
share improved by 44% to 25.2 pence. The Group's operating margin
increased to 22.1% compared with 21.8% for the first six months of
2001.
An expanding part of the Group's business is related to the provision
of affordable housing on land owned by third parties. This activity
provides positive cash flow and high return on capital employed. A
breakdown of the Group's activities segregating this element of the
business will, we believe, provide shareholders with additional
helpful information.
The balance of the Group's business is targeted at owner occupation
with developments located in major conurbations or within easy
commuting thereto. The Group has a risk management policy resulting in
there being no current schemes in central London.
The Group achieved turnover of #201.2 million compared with #145.2
million in the prior year. Within this figure, there was land sales
income of #1.0 million and other income of #6.8 million which included
turnover of #4.4 million arising from contracts where the Group has
built on third party owned land. Such turnover has previously been
included within housing turnover.
The Group's average sales price rose to #169,300 for the current year
compared to #139,900, excluding affordable housing units constructed
on third party owned land (#138,000 if included), for the comparable
six months of 2001. The average size of unit legally completed
increased by 15% and included an increase in contribution from `room
in the roof' and three storey properties which now represent an
integral part of the Group's business. This increase in average size
represented the most significant reason for the 21% rise in average
sales price. Average sales price per square foot increased by 5.3%.
As advised in the Group's trading update on 27 June 2002, the Group
anticipated progress in the medium term strategy of improving the
balance of profits between the two reporting periods. In the first six
months of 2002, the Group legally completed 1,142 homes on land which
it controls and 73 homes on land controlled by third parties. This
compared with 955 legal completions on Group controlled land and 24
legal completions on third party controlled land in the same period
last year.
Dividends
The interim dividend of the Company will amount to 4.6 pence net per
share, an increase of 9.5% over 2001's interim dividend. This dividend
will be paid on 22 November 2002 to holders of ordinary shares on the
register at the close of business on 25 October 2002.
Cash flow
The Group has generated positive cash flow from operating activities
during the six months to 30 June 2002 of #44.1 million compared with
an outflow of #24.6 million in the comparable period of 2001. The
strength of this operating cash flow allowed the Group to reduce its
net borrowings to #33.0 million compared with the opening position of
#57.2 million. This level of net borrowing represented a net
debt/equity ratio of 9.1% compared with 17.0% at the start of the
year.
Land
There continued to be focus during the first half of 2002 on securing
land in prime locations. At 30 June 2002 the Group held 10,406 plots
of consented land compared with 10,326 plots at the start of the year.
The strategic land bank stood at 20,118 potential plots at 30 June
2002, an increase on the 19,847 potential plots held at the start of
the year.
There has been considerable management effort in providing future land
to replace the current land bank on affordable terms. The most
significant transaction during the first half year arose when the
Group exchanged a legal agreement to acquire 150 acres of land at
Filton, Bristol where the Group will progress planning to build a new
village of approximately 2,200 homes.
The Group's site at Hatfield, which was acquired in 2001, is now fully
serviced following completion of the provision of infrastructure. The
first phase consisting of 211 homes, has received detailed planning
consent. Construction of the first phase has commenced and is
proceeding in line with original projections, enabling a good profit
contribution to be made in 2003.
Market conditions
Housing market activity in the first half of 2002 was strong with the
Group achieving growth in cumulative sales reservations compared with
the prior year and the Group's current 2002 forecast. During the first
half of 2002, there was widespread coverage of the potential for an
increase in interest rates and press speculation regarding the impact
that such a rate rise may have on the housing market. More recently,
the speculation has been that the base interest rate may remain stable
at its current rate of 4%.
Inflation remains under control, with underlying inflation of 2.0% at
July 2002, below the 2.5% target given to the Monetary Policy
Committee. Headline earnings growth as reported in July 2002 stood at
3.9% with marginal increases in unemployment. Continuity of low base
interest rates should maintain consumer confidence and interest in
home ownership.
Structure
As reported in the 2001 annual report and accounts, the Board of the
Company was reconstituted in early 2002 to three executive directors
along with myself and two fellow non executive directors. This change
has facilitated greater focus from the managing directors of each
region on their respective regional businesses. This is important
during a period when new regions are being established and existing
regions are increasing trading activity. The Northern region has
performed well since its launch on 1 January 2002. A new Eastern
region managing director has been appointed and plans are progressing
for the launch of this new region in 2003.
Prospects
The changes that are being made to expand the business are being
implemented on the basis of projected added shareholder value. The
Group will continue to apply its strategies aimed at maximising
shareholder return through optimising the utilisation of our land and
designing added value products.
Demand for our homes remains strong with sales reservations, contract
exchanges and legal completions ahead of the comparable period last
year. Based upon current market conditions continuing we are confident
of the prospects of the Group for the full year.
Nigel Mobbs
Chairman
9 September 2002
-0-
*T
Group profit and loss account
For the six months ended 30 June 2002 Six months Six months Year
ended ended ended
30 June 2002 30 June 2001 31 Dec 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
------------------------------------------------------------------------------------------------------
Turnover - continuing operations 201,166 145,231 358,543
Cost of sales (138,950) (99,416) (243,284)
------------------------------------------------------------------------------------------------------
Gross profit 62,216 45,815 115,259
Administrative expenses (17,696) (14,091) (30,034)
------------------------------------------------------------------------------------------------------
Operating profit - continuing operations 44,520 31,724 85,225
Profit on sale of freehold property - - 1,213
------------------------------------------------------------------------------------------------------
Profit before interest 44,520 31,724 86,438
Interest receivable and similar income 143 119 172
Interest payable and similar charges (3,124) (3,258) (6,604)
------------------------------------------------------------------------------------------------------
Profit on ordinary activities before taxation 41,539 28,585 80,006
Taxation on profit on ordinary activities (12,500) (8,684) (23,677)
------------------------------------------------------------------------------------------------------
Profit on ordinary activities after taxation 29,039 19,901 56,329
Dividends proposed/paid (5,458) (4,817) (14,549)
------------------------------------------------------------------------------------------------------
Retained profit for the financial period 23,581 15,084 41,780
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Basic earnings per ordinary share 25.2p 17.5p 49.4p
------------------------------------------------------------------------------------------------------
Diluted earnings per ordinary share 24.9p 17.3p 48.8p
------------------------------------------------------------------------------------------------------
Note of Group historical cost profits and losses
For the six months ended 30 June 2002 Six months Six months Year
ended ended ended
30 June 2002 30 June 2001 31 Dec 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
------------------------------------------------------------------------------------------------------
Profit on ordinary activities before taxation 41,539 28,585 80,006
Realisation of property revaluation gains of - - 614
previous years
------------------------------------------------------------------------------------------------------
Historical cost profit on ordinary 41,539 28,585 80,620
activities before taxation
------------------------------------------------------------------------------------------------------
Historical cost profit on ordinary 23,581 15,084 42,394
activities after taxation and dividends
------------------------------------------------------------------------------------------------------
Comparative figures have been restated to reflect a prior year
adjustment necessary as a result of the adoption of the new accounting
standard FRS 19: "Deferred tax" in the current period.
Group balance sheet
At 30 June 2002 30 June 2002 30 June 2001 31 Dec 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
------------------------------------------------------------------------------------------------------
Fixed assets
Tangible assets 7,542 9,913 6,844
Investments 1,436 1,514 1,356
------------------------------------------------------------------------------------------------------
8,978 11,427 8,200
------------------------------------------------------------------------------------------------------
Current assets
Stocks and work in progress 549,842 552,764 544,000
Debtors due within one year 8,001 6,041 10,134
Debtors due after more than one year 8,260 8,830 8,465
Cash and short term deposits 52,224 2 6,386
------------------------------------------------------------------------------------------------------
618,327 567,637 568,985
------------------------------------------------------------------------------------------------------
Creditors: amounts falling due within one (182,693) (108,993) (128,810)
year
------------------------------------------------------------------------------------------------------
Net current assets 435,634 458,644 440,175
------------------------------------------------------------------------------------------------------
Total assets less current liabilities 444,612 470,071 448,375
Creditors: amounts falling due after more (79,396) (160,075) (111,305)
than one year
Provisions for liabilities and charges (1,800) (1,326) (1,552)
------------------------------------------------------------------------------------------------------
Net assets 363,416 308,670 335,518
------------------------------------------------------------------------------------------------------
Capital and reserves
Called up share capital 58,358 57,411 57,444
Share premium 138,974 135,452 135,571
Revaluation reserve 203 817 203
Profit and loss account 165,881 114,990 142,300
------------------------------------------------------------------------------------------------------
Equity shareholders' funds 363,416 308,670 335,518
------------------------------------------------------------------------------------------------------
Comparative figures have been restated to reflect a prior year
adjustment necessary as a result of the adoption of the new accounting
standard FRS 19: "Deferred tax" in the current period.
Group cash flow statement
For the six months ended 30 June 2002 Six months Six months Year
ended ended ended
30 June 2002 30 June 2001 31 Dec 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
------------------------------------------------------------------------------------------------------
Net cash inflow/(outflow) from operating 44,074 (24,644) 43,908
activities
Returns on investments and servicing of
finance
Interest received 143 119 172
Interest paid (2,302) (3,263) (6,720)
------------------------------------------------------------------------------------------------------
(2,159) (3,144) (6,548)
------------------------------------------------------------------------------------------------------
Taxation paid (10,600) (7,600) (23,491)
------------------------------------------------------------------------------------------------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,523) (2,282) (3,368)
Sale of tangible fixed assets 287 125 4,797
Purchase of investments (400) (665) (668)
Sale of fixed asset investments 42 - 36
------------------------------------------------------------------------------------------------------
(1,594) (2,822) 797
------------------------------------------------------------------------------------------------------
Equity dividend paid (9,842) (8,878) (13,678)
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Cash inflow/(outflow) before management 19,879 (47,088) 988
of liquid resources and financing
Management of liquid resources and financing
Increase in short term deposits (43,000) - (6,000)
Increase in borrowings 18,000 42,151 2,000
Issue of ordinary share capital 4,317 2,643 2,795
------------------------------------------------------------------------------------------------------
(20,683) 44,794 (1,205)
------------------------------------------------------------------------------------------------------
Decrease in cash (804) (2,294) (217)
------------------------------------------------------------------------------------------------------
Group reconciliation of movements in shareholders' funds
For the six months ended 30 June 2002 Six months Six months Year
ended ended ended
30 June 2002 30 June 2001 31 Dec 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
------------------------------------------------------------------------------------------------------
Opening shareholders' funds 335,518 290,052 290,052
Prior year adjustment to recognise deferred - 891 891
tax asset
Issue of ordinary shares 4,317 2,643 2,795
Total recognised gains and losses for the 29,039 19,901 56,329
period
Dividends paid and proposed (5,458) (4,817) (14,549)
------------------------------------------------------------------------------------------------------
Closing shareholders' funds 363,416 308,670 335,518
------------------------------------------------------------------------------------------------------
Group reconciliation of operating profit to operating cash flows
For the six months ended 30 June 2002 Six months Six months Year
ended ended ended
30 June 2002 30 June 2001 31 Dec 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
------------------------------------------------------------------------------------------------------
Operating profit 44,520 31,724 85,225
Depreciation and amortisation 833 1,044 2,050
Profit on disposal of tangible fixed assets (17) (16) (67)
Increase in stocks (5,842) (94,179) (85,415)
Decrease/(increase) in debtors 2,317 (509) (4,430)
Increase in creditors 2,263 37,292 46,545
------------------------------------------------------------------------------------------------------
Net cash inflow/(outflow) from operating 44,074 (24,644) 43,908
activities
------------------------------------------------------------------------------------------------------
Group reconciliation and analysis of net debt
For the six months ended 30 June 2002 Six months Six months Year
ended ended ended
30 June 2002 30 June 2001 31 Dec 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
------------------------------------------------------------------------------------------------------
Decrease in cash (804) (2,294) (217)
Cash inflow/(outflow) from change in net debt 25,000 (42,151) 4,000
------------------------------------------------------------------------------------------------------
Change in net debt 24,196 (44,445) 3,783
Opening net debt (57,228) (61,011) (61,011)
------------------------------------------------------------------------------------------------------
Closing net debt (33,032) (105,456) (57,228)
------------------------------------------------------------------------------------------------------
Analysis of net debt:
Cash 3,224 2 386
Bank overdraft (4,256) (2,307) (614)
Short term deposits 49,000 - 6,000
Borrowings (81,000) (103,151) (63,000)
------------------------------------------------------------------------------------------------------
(33,032) (105,456) (57,228)
------------------------------------------------------------------------------------------------------
Notes to the accounts
1 Basis of preparation
The interim accounts have been prepared on a basis consistent with
the accounting policies adopted for the year ended 31 December
2001 including the classification of borrowings under bilateral
committed revolving loan facilities as long term. These policies
are set out in the Group's Annual Report and Accounts. The Group
has adopted the new accounting standard FRS19: "Deferred Tax"
during the first half of 2002. As a result of the implementation
of this standard a previously unrecognised deferred tax asset has
now been recognised. In the current year, a deferred tax asset of
#593,000 has been recognised and the tax charge has been adjusted
to take account of #21,000 of deferred taxation arising from the
reversal of timing differences in the first half of 2002. The
opening profit and loss reserve has been increased to reflect the
opening deferred tax asset, which would have been recognised as at
31 December 2001, amounting to #614,000. There were no other
recognised gains or losses in the current and preceding periods
other than this prior year adjustment in respect of deferred tax.
The comparative figures for the six months ended 30 June 2001 and
the year ended 31 December 2001 have been restated to reflect the
recognition of the deferred tax asset.
The interim accounts do not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985. The interim
accounts for the six months ended 30 June 2001 and 30 June 2002
have not been audited. The abridged information in these interim
accounts relating to the year ended 31 December 2001 is derived
from the full accounts upon which the auditors issued an
unqualified opinion and which have been delivered to the Registrar
of Companies.
2 Earnings per share
Basic earnings per ordinary share for the six months ended 30 June
2002 is calculated on profit after tax of #29,039,000 (six months
ended 30 June 2001: #19,901,000; year ended 31 December 2001:
#56,329,000) over the weighted average of 115,257,326 (six months
ended 30 June 2001: 113,693,156; year ended 31 December 2001:
113,977,097) ordinary shares in issue during the period.
Diluted earnings per ordinary share is calculated on profit after
tax of #29,039,000 (six months ended 30 June 2001: #19,901,000;
year ended 31 December 2001: #56,329,000) over the diluted
weighted average of 116,482,160 (six months ended 30 June 2001:
114,765,827; year ended 31 December 2001: 115,391,819) ordinary
shares potentially in issue during the year. The diluted average
number of shares is calculated in accordance with FRS 14 "Earnings
Per Share". The dilutive effect relates to the average number of
potential ordinary shares held under option during the year. This
dilutive effect amounts to the number of ordinary shares which
would be purchased using the aggregate difference in value between
the market value of shares and the share option exercise price.
The market value of shares has been calculated using the average
ordinary share price during the year. Only share options which
have met their cumulative performance criteria have been included
in the dilution calculation. There is no dilutive effect on the
profit after tax used in the diluted earnings per share
calculation.
3 Dividends
The interim dividend of 4.6 pence net per ordinary share will be
paid on 22 November 2002 to holders of ordinary shares on the
register at the close of business on 25 October 2002.
4 Taxation
The rate of corporation tax applied was 30% for the six months to
30 June 2002 and for the six months ended 30 June 2001, as
adjusted to take account of deferred taxation movements.
*T
Short Name: Bovis Homes Group
Category Code: IR
Sequence Number: 00000756
Time of Receipt (offset from UTC): 20020906T144348+0100
--30--sm/uk*
CONTACT: Bovis Homes Group PLC
KEYWORD: UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BUILDING/CONSTRUCTION REAL ESTATE EARNINGS
SOURCE: Bovis Homes Group
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