Bovis have this morning released half year results, with the shares moving down 2% in early trading.
For the six months to 30 June 2016, the group report growth in both the number of completed sales, and the average selling price of the homes. The average Bovis new build now goes for £255,000.
Despite reservation rates slowing since the vote, Bovis say it is too soon to comment on the impact of the UK’s decision to leave the EU, however the group still believe that housing market fundamentals remain strong, and remain confident that their strategy can deliver long-term growth in shareholder returns. The interim dividend has increased by 9% to 15p per share.
George Salmon, Equity Analyst at Hargreaves Lansdown:
“Despite selling more houses at higher prices in the first half of the year, the sentiment around Bovis shares remains dominated by the potentially disruptive impact that the Brexit could have on the second half of this year and beyond.
Recent surveys show confidence in the UK construction sector has fallen sharply since the vote, so it’s not hard to see why shares across the housebuilding sector are still well below their pre-referendum levels.
However, the decision by the Bank of England to lower interest rates should help to keep mortgages affordable, and plenty of other supportive factors will remain. Brits will still want to own homes, whether in or out of the EU, government schemes such as help-to-buy will almost certainly be unaffected, and the UK still faces a major housing shortage.
Looking forward, the decision to raise the dividend is a sign of the group’s confidence, however investors should be mindful of the group’s struggles with controlling labour costs, which have held back profit margins in recent years, and which look set to continue.”
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