Bovis homes increases 2013 interim dividend by 33%

Financial and operational highlights for H1 2013

With market house price increases estimated at 1% to 2% to date, average sales price increased by 15% to £188,500 (H1 2012: £164,400) primarily due to mix, modestly ahead of Group's expectations

Legal completions of 963 homes (H1 2012: 944 homes)

Average active sales outlets increased by 11% to 91 in H1 2013 (2012: 82)

2,767 consented plots on 18 sites added to the land bank during H1 2013

Contracts in place as at 30 June 2013 to acquire another 1,018 plots on 11 sites, the majority of which are expected to be added to the consented land bank in H2 2013

Consented land bank of 15,579 plots as at 30 June 2013, with potential gross profit of £733 million, calculated using prevailing sales prices and build costs (31 December 2012: 13,776 plots with gross profit potential of £600 million)

19,341 potential plots of strategic land (31 December 2012: 19,318 potential plots)

Current trading and outlook

Strong trading in the 32 weeks to 9 August 2013 with a 43% increase in private reservations to 1,712 homes (2012: 1,195)

Sales rate improvement of 28% to 0.59 net private reservations per site per week (2012: 0.46)

Cumulative sales achieved to 9 August for 2013 legal completion of 2,505 homes (2012: 1,844), with the Group now circa 90% sold for legal completions in 2013

Average sales price for 2013 legal completions expected to be at least 10% greater than 2012, primarily reflecting mix benefits with modest market price improvements

Housing gross margin expected to be between 23% and 24% for 2013 full year (2012: 22.6%), with an expected operating margin approaching 15% (2012*: 13.3%)

Further significant improvement in return on capital employed for the 2013 full year, now expected to be at least 10.0% (2012*: 7.7%)

Commenting on the results, David Ritchie, Chief Executive of Bovis Homes Group PLC said:

"The Group has performed strongly during the first half of 2013 and has delivered a 50% increase in housing operating profit. This significant increase is a result of the ongoing successful execution of the Group's strategy reflecting the compound positive effect of increased volumes, improved average sales price and stronger profit margins.

"The Group has delivered a 43% increase in private reservations in the year to date, resulting from the improving quality and increasing number of active sales outlets. This improvement has been further assisted by the positive effect of stronger home buyer sentiment, supported by the Help to Buy scheme launched in April 2013.

"The Group is circa 90% sold for the current financial year. This will allow the Group to deliver the required remaining reservations over the next few weeks and to build a significantly enhanced forward order book for 2014.

"The positive trading position, combined with an increasing proportion of legal completions on new, more profitable sites, will enable the Group to increase profits significantly in 2013 in line with its expectations, subject to stable market conditions. With a further increase in capital turn, this strong profit is expected to generate a return on capital for 2013 of at least 10%.

"The success of the Group in acquiring high quality, consented residential land, combined with the strong pipeline of future land opportunities, will support further sales outlet growth into 2014 and beyond.  This in turn is expected to lead to further strong improvements in return on capital employed going forward.

"With the progressive, sustainable improvement in the Group's profits and the Board's confidence in the Group's growth strategy, the interim dividend has been increased by 33% to 4.0 pence per share."