Interim Management Statement
08 Novembre 2010 - 8:00AM
UK Regulatory
TIDMBVS
Bovis Homes Group PLC
Interim Management Statement
8 November 2010
Bovis Homes Group PLC is today issuing its 2010 Interim
Management Statement for the period from 1 July 2010 in accordance
with the UK Listing Authority's Disclosure and Transparency Rules.
In addition, the Group is hosting a presentation for investors and
analysts between 4:00pm and 6:30pm today at RBS Hoare Govett's
offices at Bishopsgate, London. Presentation slides will be
available immediately following the presentation on the Group's web
site www.bovishomesgroup.co.uk.
The Group has maintained a solid sales rate against the backdrop
of a market which continues to be challenging, particularly with
regard to the low availability of high loan to value mortgage
finance. To 5 November, the Group has achieved 1,900 home sales
which are anticipated to legally complete during 2010, split c1,600
private homes and c300 social homes. The Group currently has over
250 forward sales for legal completion during 2011, a total which
will grow through the remaining eight weeks of 2010. Based on the
Group's average number of active sales outlets of 66 for 2010 to
date, the Group has achieved an average sales rate per outlet per
week of 0.42 homes as compared to 0.37 sales per outlet per week in
the same period of 2009, representing an improvement of 14%.
The Group has succeeded in achieving sales prices above its
internal target levels during 2010. The Group expects the average
sales price of legal completions in 2010 will be approximately
GBP160,000, some 3% ahead of 2009's average sales price of
GBP154,600. This, when combined with the initial benefits of
construction cost savings, has generated improvement in both gross
profit margin and operating profit margin. As previously guided,
the Group anticipates that its 2010 operating margin will exceed
the previous year's level of 6.2%.
The Group has made significant progress with its stated near
term strategy of acquiring land with residential planning consent,
after a period of significant residential land price falls; the
Department for Communities and Local Government indicating that
residential land with planning consent in England has now
stabilised at a value some 40% below its peak in late 2007. These
land acquisitions provide the Group with the opportunity for strong
financial returns through their development based on current market
conditions.
Having announced the addition to its consented land bank of
1,874 plots in the first half of 2010, the Group has acquired a
further 1,381 consented plots, of which 92% are located in the
south of England, in the second half of the year to date. In total,
the Group has now added 3,255 consented plots during 2010 at a cost
of GBP182 million. The land additions to date are anticipated to
generate returns in line with the Group's investment hurdle rates,
with revenue of GBP628 million and gross profit of GBP158 million
during their development period, based on current prices and costs.
In addition, the Group has agreed terms to acquire a further c2,500
plots with many now at an advanced stage in the acquisition
process.
The Group continues to hold a net cash position, with GBP14
million of net cash at the end of October, after land cash payments
in 2010 to date of cGBP106 million. The Group anticipates
generating net cash inflows during the balance of 2010 based on the
remaining trading activity in the year. Total land cash payments
for the 2010 year are expected to be cGBP147 million.
Assisted by the level of land investment achieved to date, the
Group anticipates that its average number of sales outlets during
2011 will be 76, representing an increase of 15% over 2010, which
will, subject to current market conditions continuing, provide the
Group with the opportunity to grow volumes in 2011 compared to
2010, notwithstanding that the 2011 opening sales position will be
less strong than in 2010.
Looking ahead, it is expected that market conditions will remain
challenging over the coming months. However, the Group is
confident, based on these market conditions, that with an increase
in active sales outlets it can increase its output capacity and
sell a greater number of new homes in 2011. Whilst there remains
uncertainty concerning the near term direction of house prices, the
fundamental demand and supply drivers of the housing market remain
positive which should support volume and prices in the medium term.
The strategy executed by the Group this year has prepared it well
to take advantage of such an environment with a strong balance
sheet and enhanced consented land bank delivering an increased
number of sites on which to trade.
Conference Call for Analysts and Investors
David Ritchie, Chief Executive and Jonathan Hill, Group Finance
Director of Bovis Homes will host a conference call at 09:00am
today, Monday 8 November 2010, to discuss the interim management
statement.
To access the call please dial 0207 138 0821 and quote passcode:
4113547#. 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 15 November
2010 on 0207 111 1244, accessible with the same passcode.
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.
Enquiries:
David Ritchie, Chief Executive Andrew Best / Peter Edsinger
Jonathan Hill, Group Finance Director Shared Value Limited
Bovis Homes Group PLC Tel: 020 7321 5022/38
Tel: 01474 876200
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