Bovis Homes posts record profit as margins improve
Housebuilder Bovis Homes has posted a record performance, as it took steps to boost margins.
Pre-tax profits jumped by 47.4% to £168.1 million during 2018.
Group revenue was up 3.2% to £1.06 billion, as the number of completions reached 3,759.
The group’s focus on price optimisation and margin improvement paid off, as operating margin rose 390 basis points to 16.4%.
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.”
The company also announced the creation of a Partnership Housing division, which will be dedicated to working with housing associations.
It follows moves by the Government to support the creation of more affordable housing.
The move represents an avenue for higher sales for Bovis, which said in November that uncertainty surrounding Britain’s departure from the EU was driving a slowdown in buyers of larger homes.
The company said in its most recent update that improving relationships with housing associations had helped to increase its sales.
In an update on current trading, the group said there was good demand in the first eight weeks of the financial year with average sales per site per week up 15.7%.
Bovis said it was on track to reach its medium-term targets, which include 4,000 completions a year by 2020 and further improvements to margins.
Analysts at Numis commented: “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.”