Bovis betting on a building boom

BOVIS homes is planning to ramp up construction following a record year.

The housebuilder said that its annual profits jumped 20pc to £160.1m in 2015 after a 17pc rise in revenues to £946.5m.

bovis built and sold 3,934 homes last year, up 8pc on 2014, while the average selling price rose 7pc to £231,600.

Chief executive David Ritchie said he expects further growth in the years ahead.

‘We have delivered record profit driven by another year of record volume,’ he said.

‘in the current housing market, our plan envisages the business delivering sustainable growth over the next few years to achieve annual volumes of between 5,000 and 6,000 new homes.’

bovis said it will pay a dividend of 40p a share for the year, up from 35p last time around, but by the close yesterday the stock had fallen 4pc or 36p to 874.5p.

housebuilders have benefited from strong demand for new homes at a time when the Government is trying to tackle the chronic shortage of homes across the country.

Government schemes to make borrowing easier, such as help To buy, have driven demand along with record levels of employment and rising wages.

bovis shares have more than doubled in the past five years but are down nearly 14pc since the start of 2016. The Government has moved to speed up the planning process and release more land for building in an attempt to kick-start construction.

but it is feared that growth could be held back by a shortage of skilled workers including bricklayers, electricians and plumbers.

Analysts at Jefferies gave bovis shares a ‘buy’ rating but trimmed the target price from 1588p to 1568p.

A note from experts at financial advisory service Davy said the FTSE 100 housebuilder ‘remains on track’ and added: ‘bovis points to the positive trends persisting in the Uk housing market.

‘This is expected to continue, at least in the near term, driven by the lack of supply and support from the government in the form of help To buy and the Starter homes project.’