Bovis remains confident despite uncertainty after vote for Brexit

A general view of Bovis Homes construction site.

A general view of Bovis Homes construction site. Photo: RUI VIEIRA/PA WIRE - Credit: PA

Housebuilder Bovis Homes has shrugged off heightened uncertainty following the Brexit vote to post a double-digit rise in first half profits.

The FTSE 250 firm said the “underlying market fundamentals” for the UK housing market remained positive as it reported pre-tax profits of £61.7m for the six months to June 30, 15% up on last year’s first half, with revenues 18% higher at £412.8m.

Bovis added that the number of new homes it completed rose 5% compared with a year earlier to a record 1,601 while the average selling price was 14% higher at £254,500.

Chief executive David Ritchie said:“Whilst it is too early to judge the impact of the EU Referendum and the Bank of England’s monetary policy response on the UK housing market, the underlying market fundamentals for UK housing remain positive”

He added: “We have been pleased with the resilient level of interest shown by potential home buyers contacting us.

“Our robust balance sheet, with debt lower than last year, means that we are well positioned to continue to take advantage of prime land opportunities at potentially higher returns.

“Overall, we remain confident in our strategy to deliver long-term growth in shareholder returns.”

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Bovis said it had already hit more than 90% of planned home sales for this year, with 3,877 sales as of August 12.

Mr Ritchie added: “Strong housing demand has led to overall market pricing improvements, with the group having experienced pricing ahead of expectations with Help to Buy continuing to be a significant driver of sales.

“Offsetting these pricing improvements is the impact of rising construction costs, although the impact of inflation on our cost base has moderated compared to last year.”

The bright performance from the firm comes amid a string of gloomy reports for the construction sector, suggesting the UK economy is in line for an economic slowdown.

The construction industry fell back into recession (two consecutive quarters of negative growth) for the first time in four years in the run-up to Britain’s referendum on the European Union.

The Office for National Statistics said construction output dropped by 0.7% in the second quarter, following a 0.3% fall in the first three months of the year.