Bovis sees benefits in government initiatives

NewBuy, FirstBuy and Funding for Lending schemes were all showing signs of making a positive effect, Bovis said, as it unveiled 2012 pre-tax profits up 69% to £54.1m (2011: £32.1m) on revenues up 17% to £425.5m (2011: £364.8m).

Operating profit margin went up from 2011’s 10.0% to 13.4%.

After a year of awareness building and reductions in interest rates attaching to lenders' NewBuy mortgage products, NewBuy activity is increasing, Bovis said.

The FirstBuy scheme has entered its second phase of delivery with allocations awarded to housebuilders for use in 2013 and early 2014.  This will provide further support for first time buyers in obtaining finance from lenders, the board believes.

And while not a housing initiative, the £80bn Funding for Lending Scheme is providing assistance to banks in the form of more cost-effective finance. There is growing consensus, Bovis said, that the knock-on effect of this would be seen in mortgage approval data I the months ahead.

Bovis Homes Group chief executive David Ritchie said of his company’s 2012 performance: "The group delivered strong growth in profit and return on capital employed in 2012 in a challenging but stable market environment. These improvements have been achieved through the compound positive effect of increased volumes, improved sales prices and stronger margins.

"Significant progress has also been made in positioning the group for sustained improvements in future shareholder returns. After another year of substantial land investment in 2012, the group expects to deliver a strong increase in active sales outlets in 2013. Assuming a continuation of stable market conditions, this will further enhance volumes, sales prices and profit margins.

"Combined with driving profitability, the group is aiming to deliver enhanced shareholder returns from improving the efficiency of its capital employed through continuing its focus on both land bank management and tight control of working capital.

"As a result, on the basis of stable market conditions, the group will deliver strongly increasing returns on capital employed in 2013, with the expectation of continuing progress for the foreseeable future.

In boardroom moves, Malcolm Harris will retire as non-executive chairman in November 2013 after five years’ services.

Got a story? Email news@theconstructionindex.co.uk