Efficiency drive boosts Bovis to £80m

BOVIS Homes has delivered evidence of continued strength in the housing market by unveiling a substantial increase in profits for the full year. Pre-tax profits at the housebuilder were 19.2% ahead at £80m on sales of £358.5m, up 17.5% in the year to 31 December.

Although Bovis sold only 3% more houses in 2001 than in the previous year, the average cost of each dwelling went up 14% to £148,600. The average size of the house went up by 8%, leaving the rise in price per square foot at 6%.

However, it cost Bovis 7% more per square foot to build them. This was partly due to better quality of materials but mostly because of higher labour and build costs.

Chief executive Malcolm Harris was able to point to a slight improvement in margins, achieved by squeezing central overheads. 'We have been looking at every single activity,' he said. 'It's all about efficiency.'

It had been, he said, a challenging year, citing the foot-and-mouth outbreak, flooding, and the events of 11 September. However, high levels of employment, earnings up by 4% and low interest rates kept demand for houses high.

Harris was upbeat about the coming year, with sales in the last two months 10% higher on a comparable basis.

Bovis has land with planning consent to keep it going for 4 1/4 years. Work is shortly to start on a development of 1,000 homes to be called Salisbury Village in a prime London commuter spot near Hatfield in Hertfordshire.