Bovis Homes reports record profit, hikes dividend by 20%

Bovis Homes posted record annual profit on Thursday as it hiked its dividend by 20% and hailed a good start to 2019.

In the year to the end of December 2018, pre-tax profit at the housebuilder rose 47.4% to a record £168.1m, beating market expectations, as revenue increased 3.2% to £1.06bn and completions pushed up 3.1% to 3,759.

The company declared a final ordinary dividend of 38p a share, up from 32.5p in 2017 and taking the total dividend for FY18 to 57p, up 20% on the previous year.

Bovis, which has been dogged by quality control issues, said it expects to achieve its target of a 4 star HBF customer satisfaction rating for 2018. This would be a significant improvement on its 2 star rating back in 2017.

Chief executive Greg Fitzgerald said: "The group has made substantial progress operationally over the past 18 months delivering record profits and a step change in our operating margin. We have transformed the quality of our product and customer service and are delighted this is reflected in our 4 star housebuilder status for 2018.

"Looking ahead, we are implementing many initiatives which will continue to build a better Bovis Homes including our new Phoenix housing range with its first completions this Spring, and the development of our new Partnership Housing division. We have a strong sales position and excellent land visibility and expect to make further operational and financial progress in 2019."

Bovis said it has seen good demand in the first eight weeks of this year, with average sales per site per week up 15.7% to 0.58 and pricing in line with expectations. In addition, it highlighted a strong forward sales position, with 48% of consensus FY19 revenues secured.

Numis said: "Bovis' results highlight that the self-help actions introduced by the new management have led to strong returns which have been delivered in a controlled manner. With the year starting well we expect Bovis' earnings growth to outstrip the sector and the shares are well supported by the circa 10% yield."

At 0936 GMT, the shares were up 0.4% to 1,068.50p.