The housebuilder boasted in its full-year results statement of significant operational improvements that have delivered a step change in its business and financial performance.
The group said it has seen strong sales in the first eight weeks of 2018, with a rate of 0.58 sales per site per week, up 15.7% year-on-year.
Forward sales in the bag already represent 48% of consensus forecast revenues for 2019.
Total home completions in 2018 rose 3.1% to 3,759 from 3,645 the year before, with the average selling price edging up 0.3% to £273,200 from £272,400 in 2017.
Group revenue rose 3.2% to £1.06bn from £1.03bn while the operating margin improved by almost four percentage points to 16.4% from 12.5% the year before.
Profit before tax improved 47.4% to £168.1mln from £114mln, paving the way for the full-year dividend to be hiked to 57.0p from 47.5p in 2017. The company also paid a special dividend of 45p in November last year and plans to pay around 90p a share in special divis over the next two years.
“Customer satisfaction has been at the core of all we have done during 2018 and we expect to achieve our target of a 4-star HBF customer satisfaction rating for 2018, a significant improvement from our 2-star HBF customer satisfaction rating in 2017. This shift in quality is reflected across all of our housing delivery and in the feedback we receive from our private customers and housing association partners,” said Bovis chief executive, Greg Fitzgerald.
Liberum Capital pointed out that Bovis’s results were ahead of its expectations, and believe that consensus forecasts for the housebuilder are likely to be upgraded.
The City broker repeated a ‘hold’ rating and 950p per share price target on Bovis, with its shares up 0.1% to 1,066p in afternoon trading.
In a note to clients, Liberum’s analysts pointed out: “The shares trade on 9.9x PER, yield 9.9% and a 1.3x P/TNAV for CY19E. Bellway is preferred among smaller companies as track record is stronger and shares cheaper (on 1.2x book).”
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