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Bovis Milks the Boom With 14% Price Rises

Bovis Homes BVS delivered a record number of homes in the 6 months to the end of June, allowing revenue to grow by 18%, profit before tax by 15% and earnings per share by 14%. Shareholders are rewarded with a 9% rise in the interim dividend to 15p per share and net debt has been slashed from £59m. to £8m.

That all looks very good but it appears to have been achieved mainly by imposing swingeing price rises averaging 14%, to take the average new home price to £254,000. Legal completions during the 6 months rose by only 5%. Take those two figures together and it puts the rise in profits into perspective, whilst at the same time illustrating the boom in the new housing market showed no sign of abating prior to June, save that the weekly private sales rate per site fell from 0.61 to 0.59. Since June however the decline has continued with a fall to 0.5 from 0.58 a year ago. Despite that, as at the 12th August Bovis had achieved over 90% of its planned sales for 2016 and it regards the decline in average sales rates as being seasonal.

Clarkson plc CKN has more than weathered the storm which continues to batter the shipping industry and it rightly claims that its performance for the half year to 30th June was robust. Profit before tax rose by some 70% from £10.8m to £17.5m whilst earnings per share nearly tripled from 15p to 41.7p. All this was achieved in the face of the most challenging rate environment which the industry has seen for many years and no improvement is yet in sight, at least in the short term.  The interim dividend is maintained at 22p.

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