Housebuilder Bovis trebles dividend as booming housing market sends profits soaring

By HUGO DUNCAN

Updated: 17:08 EDT, 18 August 2014

Bovis Homes trebled its dividend yesterday as the recovery in the housing market sent profits soaring.

The builder will hand investors an interim pay out of 12p a share – up from 4p this time last year – amid mounting confidence in the outlook.

Bovis said it is planning to pay a total dividend of 35p a share for 2014 and of ‘at least’ the same again for 2015.

Strong foundations: Bovis will hand investors an interim pay out of 12p a share - up from 4p this time last year - amid mounting confidence in the outlook

The pledge came as the firm reported a 166 per cent rise in profits for the first six months of the year to £49.4 million on the back of record house sales.

Shares in the housebuilder rose nearly 4.5 per cent or 36p to 837.5p.

Chief executive David Ritchie welcomed ‘a very positive’ set of results and said the dividend payments ‘reflect our confidence to grow the business’ in the coming years.

Bovis sold a record 1,487 newly built homes in the first six months of the year compared with 963 in the same period of 2013.

It said it is on course to deliver 3,650 new homes this year but plans to increase annual volumes to between 5,000 and 6,000 ‘over the next few years’.

Ritchie played down fears of higher interest rates amid speculation that the first hike since 2007 will come by early next year.

He said that he is ‘not terribly concerned about rate rises’ as long as they are the result of robust economic growth, high levels of employment and strong demand.

‘That would be a good thing,’ added Ritchie.