Bovis Homes keeps building even as house price growth slows

The FTSE 250 housebuilder unveiled strong half-year results - the property party clearly isn't over just yet.

by Sofia Collins
Last Updated: 03 Aug 2015

Bovis Homes had a stonking 2014 as house prices boomed, but it seems the party still isn’t over, even as the property market’s growth slows.

Last year its results were more than satisfactory: in the first half of 2014 sales were up 54% on the same period in 2013, while the average price for its houses rose by 11% to £210,000. By comparison, in the first half of this year the average price rose 6% to £222,000.

Bovis also completed a record 1,525 sales in the period, a 3% increase from 1,487 in 2014. It said its housing production is currently 13% ahead of 2014 and that it expects to sell 3,505 homes this year, up from 3,297 last year.

‘The group has delivered a record number of first half legal completions, made possible by the high quality land investments made during the last few years,’ said chief executive David Ritchie.

It increased its interim dividend 14% to 13.7p, up from 12% last year. Meanwhile, analysts are predicting the homebuilder will increase its profits 20%, compared to rises in the mid-teens for its competitors Taylor Wimpey, Barratt Developments and Persimmon. The increased shareholder returns and good forecasts, along with its decent results, meant its shares were up more than 2% to 1,167p around midday (the FTSE 250 is down 0.7%, as Greek woes spread).

House price rises are slowing down – they increased 5.5% in the year to April, down from 9.6% in the 12 months to March. But it looks like conditions in the housing market are still positive for housebuilders, especially Bovis.

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