More evidence of a revival in the UK housing market - boosted by government schemes - has come from Bovis Homes.
After positive updates from the likes of Persimmon and Taylor Wimpey last week, Bovis said it had seen a 40% increase in net reservations in the first six months of the year. Its sales growth accelerated in the second quarter after the launch of the government's Help to Buy scheme. It said:
The compound positive effect of greater volume, increasing average sales price and improving housing profit margin provides good visibility that, based on stable market conditions continuing, return on capital employed can be further improved in 2013 to around 10% [from 7.7% in 2012].
Bovis shares have climbed 30p to 805p while other builders also continue to rise, with Taylor Wimpey up 4.5p at 107.3p and Barratt Developments 13.3p better at 344p. On Bovis, Panmure Gordon analyst Mark Hughes said:
Bovis Homes has issued a strong trading statement for the six months to the end of June, further confirming that the first half has been strong for UK housebuilders. At this stage we maintain our hold recommendation but we have a new 714p target price (from 660p).
