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Bovis Home Group

Bovis Homes Group PLC Excellent operational progress, 47% increase in profits

Bovis Homes Group PLC (LLON:BVS) is today issuing its full year results for the 12 months ended 31 December 2018.

Highlights

– Significant operational improvements deliver step change in business and financial performance

– Transformation of customer service and 4 star HBF customer satisfaction rating for 2018

– Record year of profits with profit before tax increasing 47.4% to £168.1m, ahead of market expectations

– Another controlled and disciplined period end with completions totalling 3,759 units

– 390 basis points increase in operating margin with further progress expected in 2019

– Strong land acquisition including valuable strategic land conversion

– Excellent visibility on land with all land for 2019 having detailed consent and 97% of 2020 requirement secured

– Progress on balance sheet optimisation initiatives and now aiming for c. £250m additional net cash benefit with £180m achieved to date

– Step up in return on capital employed from 13.7% to 19.3%

– Excellent progress towards achieving all of our medium term targets

– Board recommending a 20% increase in ordinary dividend for FY18 to 57.0 pence per share reflecting the strong performance and its confidence in the outlook for the business

FY18

FY17

Change

Total completions

3,759

3,645

+3.1%

Average selling price

£273.2k

£272.4k

+0.3%

Group revenue

£1,061.4m

£1,028.2m

+3.2%

Operating margin

16.4%

12.5%

+390bp

Profit before tax

£168.1m

£114.0m

+47.4%

Earnings per share

101.6p

68.0p

+49.4%

Total dividend per share

102.0p

47.5p

+114.7%

Net cash

£126.8m

£144.9m

(12.5)%

Greg Fitzgerald, Chief Executive commented,

“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.”

Current trading and outlook

– Good demand in first eight weeks with average sales per site per week up 15.7% to 0.58 and pricing in-line with expectations

– Strong forward sales position with 48% of consensus FY19 revenues secured

– Group remains focused on controlled volume growth, price optimisation and margin enhancement

– Good progress with new Phoenix housing range and first completions expected in H1 19

– Maximising partnership housing opportunities with creation of a Partnership Housing division in 2019

– On track for completion of Wellingborough JV with c. £68m net cash benefit

– Further operational and financial progress expected in 2019