Having taken a plunge many house builders are now possibly on the up again.

Interim Management Statement

Current trading

The Group has now secured sufficient reservations to deliver its anticipated full year legal completions. Net private reservations achieved in the 45 weeks to 9 November 2012 were 1,669 (2011: 1,517). Net reservations per site per week for this period have averaged 0.46, in line with the rate achieved in the same period in 2011. The average number of active sales outlets during this period has increased by 12%. The Group is currently operating from 83 active sales outlets and expects the number at the year end to approach 90, with in excess of 30 new sales outlets launched during 2012.

Average sales price achieved in the year to date for private reservations expected to legally complete in 2012 is circa £190,000, which compares with £180,100 achieved on private legal completions in 2011. This increase reflects an improvement in the sales mix by location and size of home. Prices in the housing market are broadly stable with prices being generally stronger in the south of England.

Final Results

Operational highlights
· 2012 profit before tax at the upper end of market expectations
· Strong profit growth reflecting compound positive effect of:
· 15% growth in legal completions to 2,355 homes (2011: 2,045) from an average of 82 active sales outlets in 2012 (2011: 73)
· 5% increase in average sales price to £170,700 (2011: £162,400)
· Significant increase in operating profit margin to 13.4% (2011: 10.0%)
· Strong land investment in 3,501 consented plots during 2012:
· 2,651 plots added to the consented land bank during the year
· 850 consented plots legally contracted, awaiting satisfaction of conditions, of which 408 plots have been added to the consented land bank during early 2013
· Significant growth in future profit potential with 13,776 consented plots at 31 December 2012, with potential gross profit of £600 million, calculated using current sales prices and current build costs (31 December 2011: 13,723 plots with gross profit potential of £524 million)
· 19,318 potential plots of strategic land as at 31 December 2012 (2011: 18,749 potential plots)

Current trading
· 350 private reservations achieved in first eight weeks of 2013 (2012: 320), an increase of 9%
· Average sales price on cumulative private reservations for 2013 to date increased to circa £200,000 (2012 full year average private sales price: £188,700), with sales prices achieved in line with Group expectations
· Investment in 611 new plots of consented land during the first eight weeks of 2013 continuing to fuel growth

Citi tipsters also cast their eyes over the housing market a day after Bovis Homes (LON:BVS) and Persimmon (LON:PSN) reported their results yesterday.

Citi reckons Bovis shares are likely to take a breather after a strong run as it cuts the stock to ‘neutral’ from ‘buy’.

The housebuilder is now nearing the broker’s target price of 710p.

“More promotion of strategic land in 2013 should negatively impact 2013 profits by around £3.5m, but this should boost the land bank and improve future profitability,” Citi added.

As for Persimmon, Citi believes the cash inflow from operating activities is a sound basis for the group to deliver its capital return strategy without denting the balance sheet.

Shares in housebuilder Bovis Homes (LON:BVS) fell away this morning after a downgrade from Deutsche Bank.

The broker is bringing its recommendation back to ‘hold’ after its recent share price rally.

Sold my holding - been in since Jan 2012 at 410p

Interim Management Statement

Current trading

Trading in the 19 weeks to 10 May 2013 has been strong with the Group achieving 989 private net reservations (2012: 783), a 26% increase year on year. This has been driven by an 11% increase in the average number of active sales outlets to 91 (2012: 82), and a 14% improvement in the average private sales rate to 0.57 net reservations per site per week (2012: 0.50). The number of visitors to the Group's sites has increased by 29% in the year to date compared to the same period last year.

Having started 2013 with 249 forward sold private homes, as at 10 May 2013 the Group held 1,238 private sales for 2013 legal completion (2012: 1,013). Including social housing units expected to legally complete in 2013, at 10 May 2013 the Group's total sales position to date was 1,852 units (2012: 1,437).

Sales prices achieved on reservations to date have been modestly above management's expectations. The Group expects the average sales price in the half year results to be materially ahead of the prior year comparable period due to improved mix. The housing profit margin is also expected to increase compared to the first half of 2012.

The strong rate of reservations achieved, with a significant contribution from new sales outlets, will deliver a material increase in legal completions in the second half of the year. Legal completion volumes in the first half of 2013 are expected to be at a similar level to the first half of 2012.

Subject to current market conditions continuing, sales rates are expected to support both the delivery of the Group's volume growth targets for 2013 and allow the Group to enhance its year end forward order book, supporting further growth in 2014.

Trading Update

"The Group has performed well in the first half of 2013 with a significant further improvement in housing profit, delivered from the ongoing successful execution of the Group's growth strategy. Trading in the first half of 2013 has been strong and the Group has achieved a 40% increase in private reservations compared to the same period in 2012. Continuing its success in the land market, the Group has added 2,767 new consented plots to the land bank. With the positive progress in executing its growth strategy, the Group is well positioned to deliver higher shareholder returns."

I see today IC have a target of 900p in weeks.

Half Yearly Report

· With market house price increases estimated at 1% to 2% to date, average sales price increased by 15% to £188,500 (H1 2012: £164,400) primarily due to mix, modestly ahead of Group's expectations
· Legal completions of 963 homes (H1 2012: 944 homes)
· Average active sales outlets increased by 11% to 91 in H1 2013 (2012: 82)
· 2,767 consented plots on 18 sites added to the land bank during H1 2013
· Contracts in place as at 30 June 2013 to acquire another 1,018 plots on 11 sites, the majority of which are expected to be added to the consented land bank in H2 2013
· Consented land bank of 15,579 plots as at 30 June 2013, with potential gross profit of £733 million, calculated using prevailing sales prices and build costs (31 December 2012: 13,776 plots with gross profit potential of £600 million)
· 19,341 potential plots of strategic land (31 December 2012: 19,318 potential plots)

Shore Capital Hold 770.75 - - Retains

Prime Markets Buy 770.75 850.00 850.00 Reiterates

Numis Hold 770.75 - 800.00 Reiterates

Jefferies International Buy 770.75 909.00 995.00 Retains

Deutsche Bank Buy 770.75 900.00 900.00 Reiterates

Citigroup Buy 765.00 765.00 835.00 885.00 Upgrades

Bought 2000 at 743p and hope to make a quick 10p!

Interim Management Statement

Strong profit growth for 2013 and a significantly increased forward sales position for 2014


Bovis Homes Group PLC is today issuing an Interim Management Statement for the period from 1 July 2013.

Current trading
The Group has continued to trade strongly throughout the period, in line with expectations as at the time of its Interim Results announcement.

The Group achieved its targeted private reservations total for 2013 legal completion around the end of September, significantly earlier than in prior years. The Group has followed its plan to accelerate the building of its private forward order book for 2014, which is already materially greater than the private forward order book as at 1 January 2013.

Net private reservations achieved in the 44 weeks to 1 November 2013 were 2,390, 45% ahead of the 1,650 achieved in the same period in 2012. Net reservations per site per week for this period have averaged 0.60, an increase of 30% over the 0.46 achieved in the comparable period in 2012. The average number of active sales outlets during this period has increased by 11%.

Trading conditions remain encouraging, with improved access to higher loan to value mortgages and Government support in the form of the Help to Buy scheme contributing to an already more confident housing market.

Land acquisitions

The opportunity to purchase high quality consented land capable of delivering attractive returns remains significant. The Group has continued to invest assertively and has now added circa 3,300 plots on 22 sites to the consented land bank to date during 2013 at full hurdle rate returns. A further circa 1,200 plots on 13 sites are contracted, a number of which are expected to be added to the consented land bank before the year end.

Additionally the Group has a large number of plots under negotiation with land owners for contract either in late 2013 or 2014 with a significant proportion already with planning consent. Some of these plots are on relatively large sites where appropriate deferred terms are being negotiated to ensure strong returns can be achieved.

With the sites already acquired during 2013 and the positive pipeline, the Group is confident of delivering further strong sales outlet growth in 2014 and 2015.

Borrowings

As at 7 November 2013, the Group had net debt of £125 million. Given the phasing of housing receipts and land payments, the Group expects to end 2013 with a modest net debt position.

Outlook

The Group anticipates delivering circa 2,800 legal completions in 2013 and is well placed to achieve this, given the current sales position. The Group continues to expect the average sales price for 2013 legal completions to be at least 10% greater than that achieved in 2012, primarily reflecting mix benefits.

The gross profit margin for 2013 is expected to increase to at least 23%, benefiting from the higher proportion of legal completions on post-downturn sites. With improving overhead efficiency, the operating margin for 2013 is expected to approach 15%, strongly ahead of the 13.4% achieved in 2012.

The increasing operating margin, combined with the improving capital turn, is expected to deliver a ROCE of at least 10% in 2013. With a significantly enhanced forward order book at the start of 2014 and an increasing number of active sales outlets during 2014, the Group expects to continue its strong growth in volumes, profits and therefore ROCE, all based on current market conditions continuing.

David Ritchie, the Chief Executive of Bovis Homes Group PLC said:

"Our strong trading performance has continued through the third quarter and we are confident of achieving our targeted result for the year as whole. Our forward order book is in its best position for many years. With further increases in active sales outlets, supported by ongoing assertive land buying, the Group is confident of its future prospects and ability to deliver significantly improved returns."

Final Results

Feb 25:

Barclays: Underweight - TP up from 807.30p to 835.40p - Reiteration

Citigroup: Neutral - TP up from 940p to 980p - DownGrade

Liberum Capital: Buy - TP up from 911p to 1034p - Reiteration

UBS: Buy - TP up from 1000p to 1050p - Reiteration

Half Yearly Report

· 54% increase in legal completions to 1,487 homes (H1 2013: 963 homes)
· Average sales price on private legal completions, excluding PRS homes, of £239,500, 20% higher than H1 2013 (£200,200), driven by mix and modest improvements in house prices
· A record 4,597 consented plots on 23 sites added to the land bank
· Growing consented land bank of 17,702 plots as at 30 June 2014 (31 December 2013: 14,638 plots)
· 19,608 plots of strategic land (31 December 2013: 20,108)

Current trading and outlook
· Cumulative sales achieved to week 32 for 2014 legal completion of 3,530 homes (2013: 2,505), with the Group being nearly fully sold for legal completions in 2014
· Average sales price for 2014 legal completions expected to be between £210,000 and £215,000
· 2014 operating margin expected to increase to between 17% and 18% (2013: 14.9%)
· Material improvement in ROCE for 2014, now expected to be circa 16.0% (2013: 10.4%)

Updated strategic plan set out to deliver optimal scale and returns
· Growing to an optimal scale with annual volumes of between 5,000 and 6,000 new homes
· Managing the housing cycle to maximise returns, while effectively stewarding shareholders' capital, targeting ROCE of at least 20% by 2016
· With the Board's confidence in the strategic plan, intention to pay an enhanced dividend of 35 pence per share in 2014 and at least 35 pence per share in 2015 (2013: 13.5 pence) and a revised dividend policy thereafter

Final Results

StockMarketWire.com
Bovis Homes reports a record number of first half legal completions, made possible by the high quality land investments made during the last few years.

The group says the average sales price on legal completions increased by 6% to £222,000 (H1 2014: £210,000) and that it is on track to deliver further growth in shareholder returns.

Chief executive David Ritchie said: "We continue to trade well in a positive UK housing market delivering a strong forward sales and build position on an increased number of sales outlets. As a result we are on track to deliver our expected growth for 2015 and a further increase in return on capital employed supported by robust profit margins and improved capital turn.

"Future growth in shareholder returns is being underpinned by further disciplined investment in new consented and strategic land."

The group said that as previously guided in May of this year, its legal completion profile in 2015 is expected to be more weighted to the second half of the year than was the case in the prior year (H1 2014: 41%).

Given the higher proportion of traditional family homes along with robust housing market conditions, the Group's average private sales price increased to £264,000, 10% ahead of the comparative of £240,000 in H1 2014.

Overall, including the increased share of social housing, the Group's average sales price increased by 6% to £222,000 (H1 2014: £210,000). The group has been trading from an average of 100 sales outlets during the year to date which represents an 8% increase on the comparative period. Weekly private sales rates to date have remained robust at an average of 0.63 net private reservations per site against the strong comparative in 2014 of 0.65.

The total forward sales position for 2015 delivery, including legal completions to date, stood at 3,505 homes at 30 June 2015 (30 June 2014: 3,297). Housing production is currently 13% ahead of the prior year which provides a strong base for the planned volume growth for 2015. The Group remains on track to deliver its expected total volume of legal completions for 2015.

Merrill Lynch note:
"We view the fundamentals in the UK House Builders’ sector as positive long term with the four pillars of support, the Government, the Bank of England/ the banks, consumers and the house builders, all pointing to a healthy environment. That said, with the sector performing strongly post the election, we believe valuations are looking stretched and see the chance of an extended correction increasing, given the budget announcements yesterday and the potential for interest rate fears to emerge . We downgrade Bovis Homes to Neutral and adjust POs across the sector

Yesterday’s ‘Summer Budget 2015’ contained a restriction on tax relief on buy to let mortgages which is negative to sector sentiment, and, limitations on non-dom tax status. We believe sentiment could be further dulled by any (fears of) rising interest rate commentary in H2 that could lead to an extended correction (sector fell c12% Oct/Nov ‘03), especially considering the current elevated price levels.

In the last 3 and 12 months ahead of the budget, the sector rose by 25% and 57% respectively, a move that has more than outstripped consensus upgrades, ie the stocks have rerated over the period and now trade on an average forward PER of 10.0x, up from c8x a year ago. At the same time, the market has also rerated, from c13x in mid 2014, to 14x, which implies that the sector discount has closed.

Historically, the UK House Builders sector has performed well from November to March, before performing poorly in May and June. This year, as mentioned above, this traditionally weak period has been strong, in fact, the sector has only declined in absolute terms twice since July 2014, in September (-0.4%), and January ’15 (-2.3%). Bearish interest rate rise comments could be a correction catalyst.

We have downgraded Bovis Homes from Buy to Neutral following its 50% move from its 2015 low, to year high. This is the only recommendation change. We also raise our POs on a number of stocks; Bovis Homes from 1,000p to 1,170p, BDEV from 475p to 540p, Bellway from 2,050p to 2,500p, and Redrow from 450p to 515p.

Our key picks in the sector are Persimmon, where we have raised 2016 EPS forecasts by c6%, Taylor Wimpey which also has very strong cash flow characteristics, and Redrow. We are especially attracted to PSN and TW which offer dividend yields of 5.9%, and 7.9% respectively. Redrow, pays a very modest dividend, but on a PE basis is the cheapest stock in the sector on 8.4x 2016E."

The warning of interest rate rises to come in early 2016 seems to have hit all of the house builders today. Presumably this marks the very early stage of the 'down cycle' of the housing stocks?