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Bovis Homes expects record profits despite Brexit and election hits to prices

By Simon Neville, PA City Editor

House-builder Vistry – formerly known as Bovis Homes – said 2019 profits are expected to be at record levels, despite bosses warning that Brexit and the general election have hit house prices.

Pre-tax profits, excluding one-off costs, are set to be above market expectations of £181.6 million, with recent acquisitions working well, the company said.

Chief executive Greg Fitzgerald said: “The group has made further operational progress over the past 12 months and for 2019 expects to deliver another year of record profit.

“Building high-quality new homes for our customers has been, and remains our priority, and I am confident we will finish the year as a (Home Builders Federation) five-star house-builder.

“We completed the transformational acquisition of Linden Homes and the renamed Vistry Partnerships at the start of this year; integration is well under way, and we are fully focused on delivering the clear and significant benefits from this exciting combination as quickly as possible.”

The group completed 3,867 homes – up 108 on the year before – in the 12 months to December 31, with the average selling price rising from £273,200 to £279,000. The average selling price of private houses rose to £341,000 from £337,400.

However, Vistry said the impact of Brexit and the general election uncertainty has hit sales, with prices in the second half of 2019 falling by between 1% and 2%.

The costs from the acquisition of Linden Homes and Vistry Partnerhsips will be £15 million, the company added.

Two months ago, rival house-builder Galliford agreed to sell its Linden Homes and Partnerships and Regeneration units to Bovis in a deal worth £1.14 billion.

Analysts are hopeful that the positive update will lead to further improvements in the year ahead.

Clyde Lewis and Alex Stout, at Peel Hunt, said: “The group has not said anything about the start to the new year given that it is only a few weeks old, but we suspect activity has picked up post-election.

“If there has been a ‘Boris’ bounce in consumer confidence, the debate will be how high and for how long. We should get a pretty good idea by the end of February.”