Bovis Share Price Jumps on Upbeat Trading Update

iNVEZZ.com Monday, July 8th: Shares in Bovis Homes (LON:BVS) gained more than five percent this morning after the British homebuilder reported a large jump in first-half reservations and sales helped by government schemes, which have underpinned positive property investment sentiment.

Bovis Homes, which has focused this year on building family homes in affluent regions in southern England, today issued a trading update for the six months to June 30, in which it said it expected to post a strong increase in housing profit when it reports full half-year results on August 19.
According to the group’s statement, Bovis completed 963 homes in the period under review, with the average sales price up by 15 percent to £188,500, primarily due to its strategy of building more lucrative family homes rather than city centre flats. A total of 1,389 units were reserved in the first half, marking a 40 percent rise on 2012, the company reported.

Bovis’s net private sales rate per site per week rose by 26 percent to 0.59. After the UK government launched the Help to Buy equity loan scheme in April, the sales rate was 60 percent higher, the homebuilder remarked.
**Help to Buy Lauded Again**
According to David Ritchie, Chief Executive Officer of Bovis Homes, despite the challenging economic backdrop, the UK housing market is showing signs of improvement, with mortgage availability and property investment demand increased as a result of the Help to Buy scheme, where the government is backing up to 20 percent of deposits for individuals buying new homes under £600,000.

“The Group continues to view positively the Government’s initiatives to support the housebuilding sector,” Ritchie said in Bovis’s trading update.
His remarks echoed those of other large British homebuilders Persimmon (LON:PSN), Taylor Wimpey (LON:TW), Redrow (LON:RDW) and Galliford Try (LON:GFRD), which last week all posted improved profit forecasts and said they were experiencing a rise in property investment demand as a result of the

government’s initiatives to support the UK housing market.
**Bovis’s H1 Profit Expectations**
Bovis said that it expected to report an improved operating margin of 11 percent for the first half, up from 8.7 percent in the first half of 2012. It also predicted that if the UK housing market remains stable, shareholder return on capital would improve this year to around 10 percent, compared to 7.7 percent in 2012.

!m[British Homebuilder Sees H1 Profit Boosted by ‘Help to Buy’](/uploads/story/3753/thumbs/pic1_inline.jpg)
“The positive compound effect of increasing volume, the strong increase in the average sales price and the improving profit margin will lead to a strong increase in housing profit in the half year compared to the first half of last year,” Bovis’s trading update read.
**Bovis Share Price Gains More than 5%**
The Bovis share price gained more than five percent in London today immediately after the release of the company’s latest trading update. As of 10:56 BST the stock was up 5.03 percent, standing at 815p. Earlier today, the Bovis share price, which has gained almost 72 percent in the year to date, hit a session high of 820p.