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Bovis Homes says forward sales position strong but house price rises 'limited'

Tight cost control has offset the impact of “limited” sales price rises and build cost inflation running at around 3% to 4%, the group said.
Bovis Homes
Peel Hunt said the company's dividend yield is attractive but it sees better value elsewhere

Bovis Homes Group PLC (LON:BVS) said on Wednesday that it has a strong forward sales position and is confident of delivering home completions in line with expectations for the year.

In a trading update ahead of its annual general meeting, the housebuilder said it continued to see strong demand for new homes in the year to date with an average private sales rate per site per week of 0.61, up 17% on a year ago.

READ: Bovis Homes sees good demand in 2019

Bovis Homes has opened seven developments in the year to date and expects to open a further 16 new sites this year. It is currently operating from an average of 87 active sites.

Tight cost control has offset the impact of “limited” sales price rises and build cost inflation running at around 3% to 4%, the group said.

The company added that it was making progress with its 2020 targets to become a leading UK housebuilder and significantly improve shareholder returns.

"We have seen a strong period of trading including a step up in our sales rate,” said chief executive Greg Fitzgerald.

 He added: “We are on track to deliver another controlled and disciplined period end and make further operational and financial progress in this financial year."

The company will pay a 38p per share final dividend for the 2018 financial year on Friday. Including a special dividend of 45p per share paid in November 2018, dividends paid in the 12 months totalled 102p per share.

Peel Hunt maintained a ‘hold’ rating and target price of 1,025p.  

“The shares have bounced  nicely in 2019, modestly ahead  of the sector,” the broker said.

“The 9%-plus dividend yield retains obvious attractions for investors but we continue to see better value elsewhere in the sector.”

Shares dropped 1% to 1,034p in morning trading.

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Bovis Homes Timeline

February 28 2019

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