By Brenda Goh
LONDON Feb 24 British housebuilder Bovis Homes
aims to have the capacity to almost double the number of
homes it sells per year within the next three years, seeking to
use a strong housing market to increase its business to record
Bovis and its rivals such as Persimmon and Barratt
Developments have been boosted over the past year by a
government move to help aspiring homeowners, which has stoked
demand for newly-built homes.
Bovis, one of the sector's smaller housebuilders with a
market value of 1.2 billion pounds, aims to be in a position to
sell 4,000-5,000 homes per year in the next two to three years,
its chief executive said. It completed the sale of 2,813 homes
"We're now talking about structuring the business to have a
capacity between 4,000-5,000 units per annum in the medium term.
You can sense from that we don't expect the growth to stop for a
number of years," David Ritchie told Reuters on Monday,
referring to the next two to three years.
"We're trading on better locations, we're selling better as
an organisation, and ... we'd be naive to say that the market is
not better," he said.
The company expects to sell 3,400-3,600 homes in 2014, based
on reservation numbers in the first few weeks of the year and
its expansion of sales outlets. It secured 468 private
reservations in the first seven weeks of 2014, 64 percent more
than last year.
"Since its flotation in 1997, the business peaked at 3,100
units (in 2006), so we're already talking about 2014 being
bigger than we've ever been before," Ritchie said.
Bovis has been snapping up land and boosting sales outlets
across the country to 93. At the end of 2013, its land bank
comprised 14,638 plots with planning permission with potential
gross profit of 727 million pounds ($1.2 billion) on finished
It posted a 48 percent rise in pretax profit for the year to
the end of December of 78.8 million pounds, on revenues of 556
million pounds. Its operating profit margin was 14.9 percent, up
from 13.3 percent in 2012.
It also raised its dividend per share by 50 percent to 13.5
Analysts had forecast full year pretax profits of 74 to 79.6
million pounds on revenues of 516 to 566 million pounds, Thomson
Reuters data showed.
Describing the results as "excellent", Panmure Gordon
analyst Mark Hughes said that he was raising his target price
for the firm to 923 pence from 900.
Shares in Bovis, which are up 36 percent over the past one
year, were trading 0.5 percent lower at 895.5 pence at 1009 GMT
against the Thomson Reuters UK Homebuilding Index
which was 1.2 percent weaker.