Bovis Doubles Profit and Dividend


LONDON -- Bovis Homes (ISE: BVS.L) rallied 4% to 510 pence in early London trading after the homebuilder published its half-year results.

Bovis reported six-month sales up 27% to 170 million pounds and profit before tax up 100% to 16 million pounds. The overall performance owed to the sale of 944 homes for an average 164,400 pounds, plus the 4 million pound sale of two potential building sites.

The dividend was lifted 100% to 3 pence per share. Bovis Chief executive David Ritchie said:

"The Group has delivered a strong performance during the first half of 2012 with profit before tax doubling against the backdrop of stable, but challenging, market conditions. This increase has been delivered through the compound positive effect of increased volumes, improved average sales price and stronger profit margins. ... As a result of a greater number of active sales outlets with an increasing proportion of new, more profitable sites, the Group's profits will, subject to stable market conditions, continue to increase significantly in the second half of 2012, in line with the Group's expectations."

Bovis added that its "robust" trading had continued into the second half, with private reservations up 19% for the year to date. The FTSE 250 member also claimed average unit sale prices for 2012 were likely to be 6% higher, with the full-year operating margin to rise from 10% to 12%.

Prior to today's results, City analysts anticipated earnings of 27 pence per share and a 7 pence-per-share dividend for 2012. With the shares at 510 pence, those projections equate to a P/E of 19 and a yield of 1.4%. At present, the balance sheet may hold greater value. This morning's figures revealed net assets at 732 million pounds, or 547 pence per share, with the books backed by net cash of 22 million pounds.

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