Bovis Homes Group Plc (BVS.L) on Wednesday said market conditions remain stable in the UK housing market. If these conditions continue, the company expects to generate strongly improved returns from the delivery of its growth strategy.
In an Interim Management Statement covering the period from January 1 to date, the company said it expects profit to grow significantly from increased legal completion volume and higher average sales price.
Profit is also expected to benefit from improved profit margins due to an increased contribution from sites acquired since the housing market downturn.
Trading in the 19 weeks to May 11 was strong and the firm achieved 783 private net reservations, up 33 percent from last year.
Looking ahead, the company said, "The Group remains confident of its prospects for 2012. Based on current market conditions continuing, it is anticipated that increased legal completions at a higher average sales price and at an improved gross profit margin, alongside improved overhead efficiency, will deliver a return on capital approaching 7.5% in 2012." Return on capital was 5 percent last year.
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