Yahoo Finance Housebuilder Bovis booms despite Brexit property market 'sledgehammer'
Shares rose in Bovis Homes (BVS.L) as it shrugged off the Brexit slowdown in the property market and construction sector with strong demand for its homes.
The group said in a trading update on Tuesday it expected to report a “significant improvement” in profitability for the first half of 2019.
It said it had delivered 1,647 homes in the six months to 30 June, up from 1,580 a year earlier.
The company said the average selling price was up 3% to £270,000, and the number of private home sales per site per week was up 15% on the previous year.
"Market fundamentals remain stable and despite the ongoing uncertainty surrounding Brexit, we continue to see good demand for our new homes across all our operating regions," the company said in a statement.
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The company’s growth stands in marked contrast to the subdued wider property market, which has been struggling with lower demand and in some areas falling prices since the EU referendum in 2016.
The figures also come just a week after separate data showed the wider UK construction industry suffered its worst month since the financial crisis in June.
The monthly IHS Markit/CIPS index showed a significant contraction including in residential construction, with one analyst calling it “less of a slide than a sledgehammer.”
Shares plummeted in building materials suppier SIG (SHI.L) on Friday after it blamed a marked deterioration in activity in construction for falling first-half sales.
Bovis, which dates back to 1885, has also begun to turn around its reputation on housing quality, after a string of negative headlines about Bovis and other housebuilders in recent years.
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The FTSE 250 company saw buyers complain about the heads of nails poking through walls and a lack of sealant in bathrooms in the media in 2017.
But it has managed to improve its rating in an industry-wide customer satisfaction survey from two stars just two years ago to four stars out of five in March 2019.
Bovis said customer satisfaction since October 2018 was now “trending at above 90%,” putting it on course for a five-star rating next year.
Britain’s second biggest housebuilder Persimmon (PSN.L) reported a 4.5% hit to sales in the first half of 2019 as it tried to draw a line under a similar problem over quality in its results last week.
Persimmon shares dipped as it confirmed it had delayed sales closer to the completion of properties in order to ensure customers were happier and eradicate “cases of poor workmanship.”
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