Bovis Homes raises dividend by 50% as profits soar and it lays plans to build even more homes this year

By HUGO DUNCAN FOR THE DAILY MAIL

Updated: 02:43 EDT, 25 February 2014

Bovis Homes yesterday raised its dividend by 50 per cent as it outlined plans to increase the number of houses it builds in Britain.

The company proposed a payout to investors of 13.5p a share – compared with 9p last time around – after annual profits jumped 48 per cent to £78.8million in 2013.

Chief executive David Ritchie said he was aiming to build and sell between 3,400 and 3,600 new homes this year, having delivered a 19 per cent rise in legal completions last year to 2,813.

Upbeat: Bovis said it aimed to build and sell between 3,400 and 3,600 new homes this year

He said the company will soon have the capacity to build between 4,000 and 5,000 homes a year as the industry continues its recovery from the financial crisis. ‘It is on the horizon,’ he added.

Shares rose 21.5p to 921.5p – a level not seen since the summer of 2007 when housebuilding stocks were falling sharply in the crash.

Housebuilding boost: Rival firms are expected to follow suit with bullish figures this week

Analyst Mark Hughes, at Panmure Gordon stockbrokers, hailed ‘an excellent set of results’, with revenues up 31 per cent to £556million and average selling prices up 14 per cent to £195,000.

Rival builders are expected to follow suit with bullish figures this week starting with FTSE 100 firm Persimmon today.

Barratt Developments and Taylor Wimpey are also on course to be promoted back into the FTSE 100 index early next month as they benefit from the recovery in the housing market.

Ritchie said Bovis made ‘significant progress’ last year when ‘housing market conditions improved materially’ on the back of rising confidence.

‘Banks are lending more and customers are keen to buy,’ he said. ‘With this improving backdrop, trading conditions are expected to remain broadly positive during 2014, supporting sales rates and sales prices.’

But he played down fears that state support for the housing market such as the Government’s Help to Buy mortgage scheme is inflating another bubble.