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Bovis brushes off Brexit, ups dividend

Published: 09:03 15 Aug 2016 BST

House such as those built and sold by Bovis
Bovis said it remained too early to assess the effect of the EU referendum.

Bovis Homes Group (LON:BVS) brushed off Brexit concerns and raised its dividend by 9%, after interim results to end June showed revenues and operating profit rose 18%.

The dividend now stands at 15p per share, up from 13.7p last year. The group saw gross profit up 19% to £100.3mln, while net debt at period end was £8mln.

Bovis said it remained too early to assess the effect of the EU referendum, but it continued to see “robust levels of consumer confidence”.

After a short term slowdown in July, reservation rates have improved. The group reported 90% of planned home sales for 2016 year.

“Strong housing demand has led to overall market pricing improvements, with the group having experienced pricing ahead of expectations with Help to Buy continuing to be a significant driver of sales.”

However, it noted the pricing improvements were offset by rising construction costs.

“The group's structure allows agile decisions to be made as market conditions evolve.  The group is trading in high quality locations outside of London where the demand for its homes remains robust and support from lenders is strong.  We remain confident of our ability to trade well across these sites delivering strong returns on capital.”

Bovis is the latest in a number of property groups to have pacified investors with a dismissal of the so-called “Brexit effect”. The construction purchasing managers’ index for June plunged to the lowest level since 2009. The index deteriorated further in July following the vote, which indicated heavy contraction. Bovis has fared particularly badly, with its shares down almost 30% over the last year.

Shares fell 2% to 818.5p.

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