New homes record for upbeat Bovis

BOVIS is building a record number of new homes – but warned that it will be difficult for the industry to dramatically increase construction as demanded by politicians.

The company sold 1,525 newly built homes in the first half of this year – up from 1,487 in the same period of 2014 and a record for the firm over the six month period.

Analysts expect Bovis to deliver around 4,000 new homes this year, up from 3,635 last year, and chief executive David Ritchie said the business is on course to increase construction to ‘between 5,000 and 6,000’ a year in future.

But he said it will not be easy for the industry to build the 200,000 or so new homes required every year to tackle the chronic housing shortage in Britain. Work started on just 140,000 new homes last year.

‘We are doing what we can, but the industry as a whole may not be able to grow as quickly as we are,’ he said.

His comments came as Bovis reported a 9pc rise in revenues to £350.7m for the first half of the year and a 9pc increase in profits to £53.8m.

The company raised the interim dividend from 12p a share to 13.7p a share and Ritchie said the board intends to increase the full year payout from 35p to 40p. But the stock, which hit a seven-year high above £12 last week, dropped 38p, or more than 3pc, to 1163p having soared by more than 35pc so far this year.

Ritchie welcomed ‘a strong first half performance’ and added that 2015 ‘will be another successful year’ for the company.

Many builders are struggling to ramp up production amid a shortage of skilled workers such as bricklayers and carpenters as well as the rising cost of staff and materials such as bricks.

The Government has announced sweeping reforms to the planning system to speed up the building process and initiatives such as Help to Buy has made it easier to get mortgages.