Bovis Homes expands its footprint

Bovis Homes Group is planning to open 33 new sales outlets this year, to increase the average number of active outlets by 15% from 66 in 2010 to 76 in 2011. The company called this "the most significant site launch programme for many years".

This year has already started encouragingly, with an 11% rise in reservations in the first nine weeks.

Group revenues for 2010 were up 6% to £298.6m (2009: £281.5m) and pre-tax profit was up 147% to £18.5m (2009: £7.5m pre exceptional items).

The operating profit margin improved from 6.2% in 2009 to 7.2% in 2010.

Chief executive David Ritchie said: "The group has delivered a strong improvement in profit in 2010, driven by increased volumes, stronger sales prices and delivery of cost savings.

“The group has also made significant progress with its growth strategy through substantial land investment, a strong pipeline of further land acquisition opportunities and a strong expected increase in active sales outlets. Based on a continuation of current market conditions, this growth strategy gives the group confidence in delivering greater volumes and increased profits.

“The group is focused on enhancing shareholder returns through increased profitability and improved efficiency of its capital employed.  To this end, the group anticipates selling land on a number of its larger sites and combining the cash generated with its existing strong financial resources to support further land acquisitions. This will enhance the spread of land controlled by the group leading to an increase in active sales outlets in the future.”

 Approximately 3,700 consented plots were added to the land bank in 2010 at a cost of £203m, with 80% in the south of England.  Estimated future revenue from these is £711m, and estimated future gross profit potential is £181m, based on current sales prices and current build costs, delivering an estimated future gross margin of more than 25%. 

The consented land bank at year-end was 13,766 plots, an increase of 1,724 plots from 12,042 plots held at the end of 2009.  Of the total land bank, 69% of the plots are in the south of England, where the housing market continues to show greater robustness, Bovis saud.

Estimated gross profit potential of the entire year-end land bank is £461m, with a gross margin of 20.0%, compared to the position at 30 June 2010, when the gross profit potential was £412m with a gross margin of 19.2%. 

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