Builders return to profit

Published:  21 August, 2012

LONDON: House builders have returned to profit. Persimmon reported a 65% rise in underlying pre-tax profits in the first half of the year to £99m. Bovis Homes has posted a doubling in half-year profits pre-tax profits to £16.2m from £8.1m a year earlier and said it expects more big gains despite tougher trading conditions since June.

Persimmon's return to high profitability was helped by a rise in margins from 9% to 12.2% and completions up 6% to 4,712 new homes.

Nicholas Wrigley, chairman of Persimmon said: “These results reflect the early success of Persimmon’s new strategy to grow into a stronger, larger business whilst returning £1.9bn of surplus cash to shareholders.

Bovis Homes, like other house builders, it is benefiting from an increasing proportion of sales on sites acquired at cheaper prices after the housing market downturn.

Bovis completed 944 house sales in the first half of the year, up 18% on a year earlier and with an average sale price of £164,400. It said prices in the south, where it has 70% of its land bank, were more robust than in locations further north.

The company says: "In the short term, the group expects market pricing to remain relatively stable at the current levels, as the group foresees few significant changes in either housing market supply or overall customer demand."

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