(CEO quotes, details, background)
By Costas Pitas
LONDON Aug 18 British housebuilder Bovis Homes
is on track for a significant rise in full-year profit,
it said on Monday after a record number of completions and
improved operating margins boosted first-half earnings.
The company had virtually hit its 2014 sales target of 3,650
homes by the half-year mark and said it expects to achieve
full-year profit in line with market forecasts. Thomson Reuters
data shows that analysts expect a 60 percent rise in Bovis's
full-year operating profit.
Bovis, which has focused on more affluent regions in the
south of England in recent years, reported operating profit of
51.2 million pounds ($85.7 million) in the six months to June
30, up 150 percent on last year.
The 129-year-old company, one of several builders to benefit
from recent government schemes designed to boost the housing
sector, lifted pretax profit by 166 percent to 49.4 million
However, a series of surveys have indicated in recent weeks
that the market is beginning to cool, with one showing that the
momentum behind the London property boom is fading and another
indicating that house prices are stagnating because of tougher
mortgage lending rules.
An expected rise in Britain's record low 0.5 percent base
lending rate by early next year could also dampen housing
demand, but Bovis CEO David Ritchie said the company would
regard an interest rate rise as the right step to a more
sustainable housing market.
"If house prices (outside London) cool to something more in
line with inflation, so 1 to 2 percent per annum, that would be
perfect for us," he said. "That gives us the ability to run a
long-term sustainable business."
The group said its operating margin is expected to rise to
between 17 percent and 18 percent this year, compared with 14.9
percent in 2013.
Bovis increased its interim dividend by 200 percent to 12
pence per share.
($1 = 0.5978 British Pounds)
(Editing by Kate Holton and David Goodman)