Further evidence of a vibrant UK housing market came with news of a bumper performance from Bovis Homes (BVS) last year. Housing completions jumped by nearly a third to 3,635, while average selling prices grew by 11 per cent to £217,000. The combination justified a near trebling of the dividend.
The net profit margin rose from 14.9 per cent to 17 per cent, while the return on capital employed - another key performance indicator - jumped from 10.6 per cent to 16.2 per cent. And the trend looks set to continue, with 2,336 sales completed by late February, well ahead of the 1,875 achieved a year earlier.
Bovis has also been busy growing its land bank. It nearly doubled the number of consented plots added over the year, which lifted the consented land bank by a quarter to 18,062 plots in total. These carry estimated future revenues of £1.7bn and gross profits of £447m.
Higher building costs, specifically skilled labour, were more than covered by higher selling prices. And while spending on consented land rose from £225m to £340m, cash flow was so strong that the previous year's £18m net debt position still turned into net cash of £5m.
Analysts at broker Panmure Gordon are forecasting pre-tax profit of £173m and EPS of 102p.
| BOVIS (BVS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 950p | MARKET VALUE: | £1.3bn | |
| TOUCH: | 950-952p | 12-MONTH HIGH: | 970p | LOW: 719p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 655p | NET CASH: | £5.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 299 | 19 | 10.6 | 3 |
| 2011 | 365 | 32 | 17.5 | 5 |
| 2012 | 426 | 54 | 30.7 | 9 |
| 2013 | 556 | 79 | 44.9 | 13.5 |
| 2014 | 809 | 133 | 78.6 | 35 |
| % change | +46 | +69 | +75 | +159 |
Ex-div: 26 Mar Payment: 22 May | ||||
